Correlation Between Matas AS and Dantax

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

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

Diversification Opportunities for Matas AS and Dantax

-0.27

Correlation Coefficient

Matas AS  Dantax

Very good diversification

The 3 months correlation between Matas and Dantax is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Dantax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dantax and Matas AS 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 Matas AS are associated (or correlated) with Dantax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dantax has no effect on the direction of Matas AS i.e., Matas AS and Dantax go up and down completely randomly.

Pair Corralation between Matas AS and Dantax

Assuming the 90 days trading horizon Matas AS is expected to generate 1.03 times less return on investment than Dantax. But when comparing it to its historical volatility, Matas AS is 2.35 times less risky than Dantax. It trades about 0.32 of its potential returns per unit of risk. Dantax is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  39,600  in Dantax on September 25, 2024 and sell it today you would earn a total of  3,200  from holding Dantax or generate 8.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Matas AS  vs.  Dantax

Matas AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matas AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Matas AS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dantax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dantax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dantax is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Matas AS and Dantax

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

The idea behind Matas AS and Dantax 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..