Correlation Between TOTAL BANGUN and DFDS A/S

Can any of the company-specific risk be diversified away by investing in both TOTAL BANGUN and DFDS A/S 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 TOTAL BANGUN and DFDS A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TOTAL BANGUN PERSAD and DFDS AS, you can compare the effects of market volatilities on TOTAL BANGUN and DFDS A/S 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 TOTAL BANGUN with a short position of DFDS A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL BANGUN and DFDS A/S.

Diversification Opportunities for TOTAL BANGUN and DFDS A/S

-0.62

Correlation Coefficient

TOTAL BANGUN  DFDS A/S

Excellent diversification

The 3 months correlation between TOTAL and DFDS is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL BANGUN PERSAD and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS A/S and TOTAL BANGUN 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 TOTAL BANGUN PERSAD are associated (or correlated) with DFDS A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS A/S has no effect on the direction of TOTAL BANGUN i.e., TOTAL BANGUN and DFDS A/S go up and down completely randomly.

Pair Corralation between TOTAL BANGUN and DFDS A/S

Assuming the 90 days trading horizon TOTAL BANGUN PERSAD is expected to generate 5.83 times more return on investment than DFDS A/S. However, TOTAL BANGUN is 5.83 times more volatile than DFDS AS. It trades about 0.07 of its potential returns per unit of risk. DFDS AS is currently generating about -0.02 per unit of risk. If you would invest  1.00  in TOTAL BANGUN PERSAD on October 4, 2024 and sell it today you would earn a total of  2.15  from holding TOTAL BANGUN PERSAD or generate 215.0% return on investment over 90 days.

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

TOTAL BANGUN PERSAD  vs.  DFDS AS

TOTAL BANGUN PERSAD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TOTAL BANGUN PERSAD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TOTAL BANGUN unveiled solid returns over the last few months and may actually be approaching a breakup point.

DFDS A/S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DFDS AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TOTAL BANGUN and DFDS A/S

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

The idea behind TOTAL BANGUN PERSAD and DFDS 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.