Correlation Between Integrated Electronic and Dow Jones
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By analyzing existing cross correlation between Integrated Electronic Systems and Dow Jones Industrial, you can compare the effects of market volatilities on Integrated Electronic and Dow Jones 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 Integrated Electronic with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Electronic and Dow Jones.
Diversification Opportunities for Integrated Electronic and Dow Jones
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integrated and Dow is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Electronic Systems and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Integrated Electronic 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 Integrated Electronic Systems are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Integrated Electronic i.e., Integrated Electronic and Dow Jones go up and down completely randomly.
Pair Corralation between Integrated Electronic and Dow Jones
Assuming the 90 days trading horizon Integrated Electronic is expected to generate 1.27 times less return on investment than Dow Jones. In addition to that, Integrated Electronic is 4.32 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,394,710 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.18% |
| Values | Daily Returns |
Integrated Electronic Systems vs. Dow Jones Industrial
Performance |
| Timeline |
Integrated Electronic and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Integrated Electronic Systems
Pair trading matchups for Integrated Electronic
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Integrated Electronic and Dow Jones
The main advantage of trading using opposite Integrated Electronic and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Electronic position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.The idea behind Integrated Electronic Systems and Dow Jones Industrial 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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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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