Correlation Between DONTNOD Entertainment and Voltalia

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

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

Diversification Opportunities for DONTNOD Entertainment and Voltalia

0.89

Correlation Coefficient

DONTNOD Entertainment  Voltalia

Very poor diversification

The 3 months correlation between DONTNOD and Voltalia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding DONTNOD Entertainment SA and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA and DONTNOD Entertainment 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 DONTNOD Entertainment SA are associated (or correlated) with Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of DONTNOD Entertainment i.e., DONTNOD Entertainment and Voltalia go up and down completely randomly.

Pair Corralation between DONTNOD Entertainment and Voltalia

Assuming the 90 days trading horizon DONTNOD Entertainment SA is expected to generate 1.49 times more return on investment than Voltalia. However, DONTNOD Entertainment is 1.49 times more volatile than Voltalia SA. It trades about 0.12 of its potential returns per unit of risk. Voltalia SA is currently generating about 0.07 per unit of risk. If you would invest  72.00  in DONTNOD Entertainment SA on April 25, 2025 and sell it today you would earn a total of  18.00  from holding DONTNOD Entertainment SA or generate 25.0% return on investment over 90 days.

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

DONTNOD Entertainment SA  vs.  Voltalia SA

DONTNOD Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DONTNOD Entertainment SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, DONTNOD Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Voltalia SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voltalia SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Voltalia may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with DONTNOD Entertainment and Voltalia

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

The idea behind DONTNOD Entertainment SA and Voltalia SA 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.