Correlation Between Nilfisk Holding and DI Global

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

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

Diversification Opportunities for Nilfisk Holding and DI Global

-0.66

Correlation Coefficient

Nilfisk Holding  DI Global

Excellent diversification

The 3 months correlation between Nilfisk and DKIGSFUT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nilfisk Holding AS and DI Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DI Global Sustainable and Nilfisk Holding 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 Nilfisk Holding AS are associated (or correlated) with DI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DI Global Sustainable has no effect on the direction of Nilfisk Holding i.e., Nilfisk Holding and DI Global go up and down completely randomly.

Pair Corralation between Nilfisk Holding and DI Global

Assuming the 90 days trading horizon Nilfisk Holding AS is expected to under-perform the DI Global. In addition to that, Nilfisk Holding is 1.88 times more volatile than DI Global Sustainable. It trades about -0.23 of its total potential returns per unit of risk. DI Global Sustainable is currently generating about -0.06 per unit of volatility. If you would invest  39,530  in DI Global Sustainable on October 9, 2024 and sell it today you would lose (290.00) from holding DI Global Sustainable or give up 0.73% of portfolio value over 90 days.

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

Nilfisk Holding AS  vs.  DI Global Sustainable

Nilfisk Holding AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

DI Global Sustainable

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DI Global Sustainable are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, DI Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nilfisk Holding and DI Global

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

The idea behind Nilfisk Holding AS and DI Global Sustainable 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.