Correlation Between Hexagon Purus and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hexagon Purus 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 Hexagon Purus and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexagon Purus AS and Dow Jones Industrial, you can compare the effects of market volatilities on Hexagon Purus 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 Hexagon Purus with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexagon Purus and Dow Jones.
Diversification Opportunities for Hexagon Purus and Dow Jones
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hexagon and Dow is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon Purus AS 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 Hexagon Purus 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 Hexagon Purus AS 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 Hexagon Purus i.e., Hexagon Purus and Dow Jones go up and down completely randomly.
Pair Corralation between Hexagon Purus and Dow Jones
Assuming the 90 days trading horizon Hexagon Purus AS is expected to generate 17.35 times more return on investment than Dow Jones. However, Hexagon Purus is 17.35 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of risk. If you would invest 63.00 in Hexagon Purus AS on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Hexagon Purus AS or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexagon Purus AS vs. Dow Jones Industrial
Performance |
| Timeline |
Hexagon Purus and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hexagon Purus AS
Pair trading matchups for Hexagon Purus
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hexagon Purus and Dow Jones
The main advantage of trading using opposite Hexagon Purus and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexagon Purus 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.| Hexagon Purus vs. SENECA FOODS A | Hexagon Purus vs. TOWNSQUARE MEDIA INC | Hexagon Purus vs. PARKEN Sport Entertainment | Hexagon Purus vs. Hollywood Bowl Group |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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