Correlation Between Dataproces Group and Novabase SGPS

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

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

Diversification Opportunities for Dataproces Group and Novabase SGPS

-0.5

Correlation Coefficient

Dataproces Group  Novabase SGPS

Very good diversification

The 3 months correlation between Dataproces and Novabase is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and Novabase SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novabase SGPS and Dataproces Group 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 Dataproces Group AS are associated (or correlated) with Novabase SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novabase SGPS has no effect on the direction of Dataproces Group i.e., Dataproces Group and Novabase SGPS go up and down completely randomly.

Pair Corralation between Dataproces Group and Novabase SGPS

Assuming the 90 days trading horizon Dataproces Group AS is expected to under-perform the Novabase SGPS. In addition to that, Dataproces Group is 1.52 times more volatile than Novabase SGPS. It trades about -0.05 of its total potential returns per unit of risk. Novabase SGPS is currently generating about 0.17 per unit of volatility. If you would invest  632.00  in Novabase SGPS on April 21, 2025 and sell it today you would earn a total of  148.00  from holding Novabase SGPS or generate 23.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Dataproces Group AS  vs.  Novabase SGPS

Dataproces Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dataproces Group AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Novabase SGPS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Novabase SGPS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Novabase SGPS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dataproces Group and Novabase SGPS

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

The idea behind Dataproces Group AS and Novabase SGPS 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.