Two Equities Correlation Analysis

This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.

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Can any of the company-specific risk be diversified away by investing in both PFA Invest and DOW at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing PFA Invest and DOW into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for PFA Invest and DOW

-0.14
Correlation
PI
DOW

Good diversification

The 3 months correlation between PFIUDO and DOW is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding PFA Invest Udenlandske Obl and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and PFA Invest 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 PFA Invest Udenlandske are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of PFA Invest i.e. PFA Invest and DOW go up and down completely randomly.
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Pair Corralation between PFA Invest and DOW

Assuming 30 trading days horizon, PFA Invest Udenlandske is expected to generate 0.21 times more return on investment than DOW. However, PFA Invest Udenlandske is 4.78 times less risky than DOW. It trades about 0.1 of its potential returns per unit of risk. DOW is currently generating about 0.0 per unit of risk. If you would invest  9,904  in PFA Invest Udenlandske on April 29, 2020 and sell it today you would earn a total of  136.00  from holding PFA Invest Udenlandske or generate 1.37% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy25.81%
ValuesDaily Returns

PFA Invest Udenlandske Obl  vs.  DOW

 Performance (%) 
      Timeline 
 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Global Correlations module to find global opportunities by holding instruments from different markets.


 
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