Correlation Between DSV Panalpina and DFDS AS

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

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

Diversification Opportunities for DSV Panalpina and DFDS AS

0.92

Correlation Coefficient

DSV Panalpina  DFDS AS

Almost no diversification

The 3 months correlation between DSV and DFDS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS AS and DSV Panalpina 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 DSV Panalpina AS are associated (or correlated) with DFDS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS AS has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and DFDS AS go up and down completely randomly.

Pair Corralation between DSV Panalpina and DFDS AS

Assuming the 90 days trading horizon DSV Panalpina AS is expected to under-perform the DFDS AS. In addition to that, DSV Panalpina is 1.09 times more volatile than DFDS AS. It trades about -0.15 of its total potential returns per unit of risk. DFDS AS is currently generating about 0.21 per unit of volatility. If you would invest  20,120  in DFDS AS on January 25, 2024 and sell it today you would earn a total of  860.00  from holding DFDS AS or generate 4.27% return on investment over 90 days.

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

DSV Panalpina AS  vs.  DFDS AS

DSV Panalpina AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

DFDS AS

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. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with DSV Panalpina and DFDS AS

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

The idea behind DSV Panalpina AS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.