Correlation Between CDSPI Petite and Dow Jones
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By analyzing existing cross correlation between CDSPI petite cap and Dow Jones Industrial, you can compare the effects of market volatilities on CDSPI Petite 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 CDSPI Petite with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDSPI Petite and Dow Jones.
Diversification Opportunities for CDSPI Petite and Dow Jones
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CDSPI and Dow is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CDSPI petite cap 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 CDSPI Petite 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 CDSPI petite cap 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 CDSPI Petite i.e., CDSPI Petite and Dow Jones go up and down completely randomly.
Pair Corralation between CDSPI Petite and Dow Jones
Assuming the 90 days trading horizon CDSPI petite cap is expected to generate 1.47 times more return on investment than Dow Jones. However, CDSPI Petite is 1.47 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 5,564 in CDSPI petite cap on October 30, 2024 and sell it today you would earn a total of 1,852 from holding CDSPI petite cap or generate 33.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDSPI petite cap vs. Dow Jones Industrial
Performance |
| Timeline |
CDSPI Petite and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CDSPI petite cap
Pair trading matchups for CDSPI Petite
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CDSPI Petite and Dow Jones
The main advantage of trading using opposite CDSPI Petite and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDSPI Petite 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.| CDSPI Petite vs. iShares Canadian HYBrid | CDSPI Petite vs. Altagas Cum Red | CDSPI Petite vs. European Residential Real | CDSPI Petite vs. iShares Fundamental Hedged |
| Dow Jones vs. Snap On | Dow Jones vs. Hillman Solutions Corp | Dow Jones vs. RBC Bearings Incorporated | Dow Jones vs. Rocky Brands |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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