Correlation Between Din Capital and PV2 Investment

Can any of the company-specific risk be diversified away by investing in both Din Capital and PV2 Investment 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 Din Capital and PV2 Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Din Capital Investment and PV2 Investment JSC, you can compare the effects of market volatilities on Din Capital and PV2 Investment 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 Din Capital with a short position of PV2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and PV2 Investment.

Diversification Opportunities for Din Capital and PV2 Investment

0.13

Correlation Coefficient

Din Capital  PV2 Investment

Average diversification

The 3 months correlation between Din and PV2 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and PV2 Investment JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PV2 Investment JSC and Din Capital 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 Din Capital Investment are associated (or correlated) with PV2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PV2 Investment JSC has no effect on the direction of Din Capital i.e., Din Capital and PV2 Investment go up and down completely randomly.

Pair Corralation between Din Capital and PV2 Investment

Assuming the 90 days trading horizon Din Capital Investment is expected to generate 0.82 times more return on investment than PV2 Investment. However, Din Capital Investment is 1.22 times less risky than PV2 Investment. It trades about 0.04 of its potential returns per unit of risk. PV2 Investment JSC is currently generating about 0.0 per unit of risk. If you would invest  857,143  in Din Capital Investment on October 3, 2024 and sell it today you would earn a total of  162,857  from holding Din Capital Investment or generate 19.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.11%
Values	Daily Returns

Din Capital Investment  vs.  PV2 Investment JSC

Din Capital Investment

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

PV2 Investment JSC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PV2 Investment JSC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, PV2 Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Din Capital and PV2 Investment

The main advantage of trading using opposite Din Capital and PV2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Din Capital position performs unexpectedly, PV2 Investment 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 PV2 Investment will offset losses from the drop in PV2 Investment's long position.

The idea behind Din Capital Investment and PV2 Investment JSC 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.