Correlation Between HusCompagniet and Dataproces Group

Can any of the company-specific risk be diversified away by investing in both HusCompagniet and Dataproces Group 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 HusCompagniet and Dataproces Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HusCompagniet AS and Dataproces Group AS, you can compare the effects of market volatilities on HusCompagniet and Dataproces Group 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 HusCompagniet with a short position of Dataproces Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HusCompagniet and Dataproces Group.

Diversification Opportunities for HusCompagniet and Dataproces Group

-0.67

Correlation Coefficient

HusCompagniet  Dataproces Group

Excellent diversification

The 3 months correlation between HusCompagniet and Dataproces is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding HusCompagniet AS and Dataproces Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataproces Group and HusCompagniet 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 HusCompagniet AS are associated (or correlated) with Dataproces Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataproces Group has no effect on the direction of HusCompagniet i.e., HusCompagniet and Dataproces Group go up and down completely randomly.

Pair Corralation between HusCompagniet and Dataproces Group

Assuming the 90 days trading horizon HusCompagniet AS is expected to under-perform the Dataproces Group. But the stock apears to be less risky and, when comparing its historical volatility, HusCompagniet AS is 1.55 times less risky than Dataproces Group. The stock trades about -0.14 of its potential returns per unit of risk. The Dataproces Group AS is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  590.00  in Dataproces Group AS on December 29, 2024 and sell it today you would earn a total of  355.00  from holding Dataproces Group AS or generate 60.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

HusCompagniet AS  vs.  Dataproces Group AS

HusCompagniet AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days HusCompagniet AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dataproces Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dataproces Group AS are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dataproces Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HusCompagniet and Dataproces Group

The main advantage of trading using opposite HusCompagniet and Dataproces Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HusCompagniet position performs unexpectedly, Dataproces Group 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 Dataproces Group will offset losses from the drop in Dataproces Group's long position.

The idea behind HusCompagniet AS and Dataproces Group AS 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.