Correlation Between Entra ASA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Entra ASA 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 Entra ASA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entra ASA and Dow Jones Industrial, you can compare the effects of market volatilities on Entra ASA 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 Entra ASA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entra ASA and Dow Jones.
Diversification Opportunities for Entra ASA and Dow Jones
Poor diversification
The 3 months correlation between Entra and Dow is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Entra ASA 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 Entra ASA 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 Entra ASA 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 Entra ASA i.e., Entra ASA and Dow Jones go up and down completely randomly.
Pair Corralation between Entra ASA and Dow Jones
Assuming the 90 days trading horizon Entra ASA is expected to generate 2.51 times more return on investment than Dow Jones. However, Entra ASA is 2.51 times more volatile than Dow Jones Industrial. It trades about -0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.31 per unit of risk. If you would invest 11,880 in Entra ASA on December 11, 2024 and sell it today you would lose (710.00) from holding Entra ASA or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Entra ASA vs. Dow Jones Industrial
Performance |
| Timeline |
Entra ASA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Entra ASA
Pair trading matchups for Entra ASA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Entra ASA and Dow Jones
The main advantage of trading using opposite Entra ASA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entra ASA 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.| Entra ASA vs. Software Circle plc | Entra ASA vs. Aptitude Software Group | Entra ASA vs. Fulcrum Metals PLC | Entra ASA vs. Dentsply Sirona |
| Dow Jones vs. The Gap, | Dow Jones vs. Corporacion America Airports | Dow Jones vs. Mesa Air Group | Dow Jones vs. National Vision Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |