Correlation Between GobiMin and Demant A/S

Can any of the company-specific risk be diversified away by investing in both GobiMin and Demant A/S at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GobiMin and Demant A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GobiMin and Demant AS ADR, you can compare the effects of market volatilities on GobiMin and Demant A/S and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GobiMin with a short position of Demant A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of GobiMin and Demant A/S.

Diversification Opportunities for GobiMin and Demant A/S

0.0

Correlation Coefficient

GobiMin  Demant A/S

Pay attention - limited upside

The 3 months correlation between GobiMin and Demant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GobiMin and Demant AS ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Demant AS ADR and GobiMin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GobiMin are associated (or correlated) with Demant A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Demant AS ADR has no effect on the direction of GobiMin i.e., GobiMin and Demant A/S go up and down completely randomly.

Pair Corralation between GobiMin and Demant A/S

If you would invest  1,830  in Demant AS ADR on December 29, 2024 and sell it today you would lose (10.00) from holding Demant AS ADR or give up 0.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GobiMin  vs.  Demant AS ADR

GobiMin

Risk-Adjusted Performance

Very Weak

Over the last 90 days GobiMin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GobiMin is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Demant AS ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Demant AS ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Demant A/S is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GobiMin and Demant A/S

The main advantage of trading using opposite GobiMin and Demant A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GobiMin position performs unexpectedly, Demant A/S can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Demant A/S will offset losses from the drop in Demant A/S's long position.

The idea behind GobiMin and Demant AS ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.