Correlation Between Ringkjoebing Landbobank and Dataproces Group

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

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

Diversification Opportunities for Ringkjoebing Landbobank and Dataproces Group

0.31

Correlation Coefficient

Ringkjoebing Landbobank  Dataproces Group

Weak diversification

The 3 months correlation between Ringkjoebing and Dataproces is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ringkjoebing Landbobank 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 Ringkjoebing Landbobank 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 Ringkjoebing Landbobank 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 Ringkjoebing Landbobank i.e., Ringkjoebing Landbobank and Dataproces Group go up and down completely randomly.

Pair Corralation between Ringkjoebing Landbobank and Dataproces Group

Assuming the 90 days trading horizon Ringkjoebing Landbobank AS is expected to generate 0.51 times more return on investment than Dataproces Group. However, Ringkjoebing Landbobank AS is 1.97 times less risky than Dataproces Group. It trades about 0.15 of its potential returns per unit of risk. Dataproces Group AS is currently generating about 0.01 per unit of risk. If you would invest  107,200  in Ringkjoebing Landbobank AS on October 22, 2024 and sell it today you would earn a total of  12,200  from holding Ringkjoebing Landbobank AS or generate 11.38% return on investment over 90 days.

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

Ringkjoebing Landbobank AS  vs.  Dataproces Group AS

Ringkjoebing Landbobank

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ringkjoebing Landbobank AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Ringkjoebing Landbobank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dataproces Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ringkjoebing Landbobank and Dataproces Group

The main advantage of trading using opposite Ringkjoebing Landbobank and Dataproces Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ringkjoebing Landbobank 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 Ringkjoebing Landbobank 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.