Correlation Between Prosegur Cash and DSV Panalpina

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

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

Diversification Opportunities for Prosegur Cash and DSV Panalpina

-0.05

Correlation Coefficient

Prosegur Cash  DSV Panalpina

Good diversification

The 3 months correlation between Prosegur and DSV is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Prosegur Cash SA and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS and Prosegur Cash 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 Prosegur Cash SA are associated (or correlated) with DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Prosegur Cash i.e., Prosegur Cash and DSV Panalpina go up and down completely randomly.

Pair Corralation between Prosegur Cash and DSV Panalpina

Assuming the 90 days horizon Prosegur Cash is expected to generate 324.88 times less return on investment than DSV Panalpina. But when comparing it to its historical volatility, Prosegur Cash SA is 4.42 times less risky than DSV Panalpina. It trades about 0.0 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  9,112  in DSV Panalpina AS on August 31, 2024 and sell it today you would earn a total of  1,547  from holding DSV Panalpina AS or generate 16.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.25%
Values	Daily Returns

Prosegur Cash SA  vs.  DSV Panalpina AS

Prosegur Cash SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

DSV Panalpina AS

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DSV Panalpina AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, DSV Panalpina showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prosegur Cash and DSV Panalpina

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

The idea behind Prosegur Cash SA and DSV Panalpina 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.