Correlation Between Dorma Kaba and Fundamenta Real

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

By analyzing existing cross correlation between Dorma Kaba Holding and Fundamenta Real Estate, you can compare the effects of market volatilities on Dorma Kaba and Fundamenta Real 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 Dorma Kaba with a short position of Fundamenta Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorma Kaba and Fundamenta Real.

Diversification Opportunities for Dorma Kaba and Fundamenta Real

0.76

Correlation Coefficient

Dorma Kaba  Fundamenta Real

Poor diversification

The 3 months correlation between Dorma and Fundamenta is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dorma Kaba Holding and Fundamenta Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamenta Real Estate and Dorma Kaba 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 Dorma Kaba Holding are associated (or correlated) with Fundamenta Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamenta Real Estate has no effect on the direction of Dorma Kaba i.e., Dorma Kaba and Fundamenta Real go up and down completely randomly.

Pair Corralation between Dorma Kaba and Fundamenta Real

Assuming the 90 days trading horizon Dorma Kaba Holding is expected to generate 1.57 times more return on investment than Fundamenta Real. However, Dorma Kaba is 1.57 times more volatile than Fundamenta Real Estate. It trades about 0.21 of its potential returns per unit of risk. Fundamenta Real Estate is currently generating about 0.07 per unit of risk. If you would invest  66,200  in Dorma Kaba Holding on April 22, 2025 and sell it today you would earn a total of  12,600  from holding Dorma Kaba Holding or generate 19.03% return on investment over 90 days.

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

Dorma Kaba Holding  vs.  Fundamenta Real Estate

Dorma Kaba Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dorma Kaba Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Dorma Kaba showed solid returns over the last few months and may actually be approaching a breakup point.

Fundamenta Real Estate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamenta Real Estate are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Fundamenta Real is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Dorma Kaba and Fundamenta Real

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

The idea behind Dorma Kaba Holding and Fundamenta Real Estate 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.