Correlation Between Dun Bradstreet and Maj Invest

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

By analyzing existing cross correlation between Dun Bradstreet Holdings and Maj Invest , you can compare the effects of market volatilities on Dun Bradstreet and Maj Invest 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 Dun Bradstreet with a short position of Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dun Bradstreet and Maj Invest.

Diversification Opportunities for Dun Bradstreet and Maj Invest

-0.83

Correlation Coefficient

Dun Bradstreet  Maj Invest

Pay attention - limited upside

The 3 months correlation between Dun and Maj is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dun Bradstreet Holdings and Maj Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest and Dun Bradstreet 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 Dun Bradstreet Holdings are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest has no effect on the direction of Dun Bradstreet i.e., Dun Bradstreet and Maj Invest go up and down completely randomly.

Pair Corralation between Dun Bradstreet and Maj Invest

Considering the 90-day investment horizon Dun Bradstreet Holdings is expected to under-perform the Maj Invest. In addition to that, Dun Bradstreet is 6.29 times more volatile than Maj Invest . It trades about -0.17 of its total potential returns per unit of risk. Maj Invest is currently generating about -0.03 per unit of volatility. If you would invest  9,526  in Maj Invest on January 19, 2024 and sell it today you would lose (17.00) from holding Maj Invest or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	82.61%
Values	Daily Returns

Dun Bradstreet Holdings  vs.  Maj Invest

Dun Bradstreet Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dun Bradstreet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Maj Invest

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maj Invest are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong forward-looking signals, Maj Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dun Bradstreet and Maj Invest

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

The idea behind Dun Bradstreet Holdings and Maj Invest 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.

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 Stocks Directory module to find actively traded stocks across global markets.