Correlation Between Dmc Global and Graham
Can any of the company-specific risk be diversified away by investing in both Dmc Global and Graham 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 Dmc Global and Graham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dmc Global and Graham, you can compare the effects of market volatilities on Dmc Global and Graham 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 Dmc Global with a short position of Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dmc Global and Graham.
Diversification Opportunities for Dmc Global and Graham
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dmc and Graham is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dmc Global and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham and Dmc Global 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 Dmc Global are associated (or correlated) with Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of Dmc Global i.e., Dmc Global and Graham go up and down completely randomly.
Pair Corralation between Dmc Global and Graham
Given the investment horizon of 90 days Dmc Global is expected to under-perform the Graham. In addition to that, Dmc Global is 2.23 times more volatile than Graham. It trades about -0.36 of its total potential returns per unit of risk. Graham is currently generating about -0.18 per unit of volatility. If you would invest 3,015 in Graham on February 6, 2024 and sell it today you would lose (212.00) from holding Graham or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dmc Global vs. Graham
Performance |
| Timeline |
| Dmc Global |
| Graham |
Dmc Global and Graham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dmc Global and Graham
The main advantage of trading using opposite Dmc Global and Graham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dmc Global position performs unexpectedly, Graham 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 Graham will offset losses from the drop in Graham's long position.| Dmc Global vs. Weatherford International PLC | Dmc Global vs. Tenaris SA ADR | Dmc Global vs. Now Inc | Dmc Global vs. Cactus Inc |
| Graham vs. Luxfer Holdings PLC | Graham vs. Enerpac Tool Group | Graham vs. Kadant Inc | Graham vs. Omega Flex |
Check out your portfolio center.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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