Correlation Between Sword Group and Dekuple

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

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

Diversification Opportunities for Sword Group and Dekuple

0.34

Correlation Coefficient

Sword Group  Dekuple

Weak diversification

The 3 months correlation between Sword and Dekuple is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sword Group SE and Dekuple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dekuple and Sword Group 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 Sword Group SE are associated (or correlated) with Dekuple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dekuple has no effect on the direction of Sword Group i.e., Sword Group and Dekuple go up and down completely randomly.

Pair Corralation between Sword Group and Dekuple

Assuming the 90 days trading horizon Sword Group SE is expected to generate 0.86 times more return on investment than Dekuple. However, Sword Group SE is 1.17 times less risky than Dekuple. It trades about -0.04 of its potential returns per unit of risk. Dekuple is currently generating about -0.04 per unit of risk. If you would invest  3,665  in Sword Group SE on September 28, 2024 and sell it today you would lose (130.00) from holding Sword Group SE or give up 3.55% of portfolio value over 90 days.

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

Sword Group SE  vs.  Dekuple

Sword Group SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sword Group SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sword Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dekuple

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dekuple has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Dekuple is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sword Group and Dekuple

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

The idea behind Sword Group SE and Dekuple 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.