Correlation Between KPX Green and Dow Jones
Can any of the company-specific risk be diversified away by investing in both KPX Green and Dow Jones 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 KPX Green and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and Dow Jones Industrial, you can compare the effects of market volatilities on KPX Green 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 KPX Green with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and Dow Jones.
Diversification Opportunities for KPX Green and Dow Jones
Pay attention - limited upside
The 3 months correlation between KPX and Dow is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical 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 KPX Green 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 KPX Green Chemical 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 KPX Green i.e., KPX Green and Dow Jones go up and down completely randomly.
Pair Corralation between KPX Green and Dow Jones
Assuming the 90 days trading horizon KPX Green Chemical is expected to under-perform the Dow Jones. In addition to that, KPX Green is 4.33 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 3,293,008 in Dow Jones Industrial on September 26, 2024 and sell it today you would earn a total of 1,036,695 from holding Dow Jones Industrial or generate 31.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.38% |
| Values | Daily Returns |
KPX Green Chemical vs. Dow Jones Industrial
Performance |
| Timeline |
KPX Green and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
KPX Green Chemical
Pair trading matchups for KPX Green
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KPX Green and Dow Jones
The main advantage of trading using opposite KPX Green and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green 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.| KPX Green vs. Koryo Credit Information | KPX Green vs. Moadata Co | KPX Green vs. PlayD Co | KPX Green vs. LG Display Co |
| Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |