Correlation Between CM AM and Dow Jones
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By analyzing existing cross correlation between CM AM Monplus NE and Dow Jones Industrial, you can compare the effects of market volatilities on CM AM 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 CM AM with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM AM and Dow Jones.
Diversification Opportunities for CM AM and Dow Jones
Very poor diversification
The 3 months correlation between 0P0001F96C and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CM AM Monplus NE 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 CM AM 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 CM AM Monplus NE 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 CM AM i.e., CM AM and Dow Jones go up and down completely randomly.
Pair Corralation between CM AM and Dow Jones
Assuming the 90 days trading horizon CM AM is expected to generate 34.06 times less return on investment than Dow Jones. But when comparing it to its historical volatility, CM AM Monplus NE is 115.62 times less risky than Dow Jones. It trades about 1.26 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
CM AM Monplus NE vs. Dow Jones Industrial
Performance |
| Timeline |
CM AM and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CM AM Monplus NE
Pair trading matchups for CM AM
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CM AM and Dow Jones
The main advantage of trading using opposite CM AM and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM AM 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.| CM AM vs. Groupama Entreprises N | CM AM vs. Renaissance Europe C | CM AM vs. Superior Plus Corp | CM AM vs. Origin Agritech |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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