Correlation Between Berner Kantonalbank and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Berner Kantonalbank 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 Berner Kantonalbank and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berner Kantonalbank AG and Dow Jones Industrial, you can compare the effects of market volatilities on Berner Kantonalbank 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 Berner Kantonalbank with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berner Kantonalbank and Dow Jones.
Diversification Opportunities for Berner Kantonalbank and Dow Jones
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berner and Dow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Berner Kantonalbank AG 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 Berner Kantonalbank 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 Berner Kantonalbank AG 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 Berner Kantonalbank i.e., Berner Kantonalbank and Dow Jones go up and down completely randomly.
Pair Corralation between Berner Kantonalbank and Dow Jones
Assuming the 90 days trading horizon Berner Kantonalbank is expected to generate 2.28 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Berner Kantonalbank AG is 1.37 times less risky than Dow Jones. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,053,993 in Dow Jones Industrial on October 25, 2024 and sell it today you would earn a total of 361,680 from holding Dow Jones Industrial or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Berner Kantonalbank AG vs. Dow Jones Industrial
Performance |
| Timeline |
Berner Kantonalbank and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Berner Kantonalbank AG
Pair trading matchups for Berner Kantonalbank
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Berner Kantonalbank and Dow Jones
The main advantage of trading using opposite Berner Kantonalbank and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berner Kantonalbank 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.| Berner Kantonalbank vs. Toyota Motor Corp | Berner Kantonalbank vs. SoftBank Group Corp | Berner Kantonalbank vs. OTP Bank Nyrt | Berner Kantonalbank vs. ONEOK Inc |
| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
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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