Correlation Between Itcen Co and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Itcen Co 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 Itcen Co and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itcen Co and Dow Jones Industrial, you can compare the effects of market volatilities on Itcen Co 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 Itcen Co with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itcen Co and Dow Jones.
Diversification Opportunities for Itcen Co and Dow Jones
Very good diversification
The 3 months correlation between Itcen and Dow is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Itcen Co 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 Itcen Co 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 Itcen Co 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 Itcen Co i.e., Itcen Co and Dow Jones go up and down completely randomly.
Pair Corralation between Itcen Co and Dow Jones
Assuming the 90 days trading horizon Itcen Co is expected to generate 5.96 times more return on investment than Dow Jones. However, Itcen Co is 5.96 times more volatile than Dow Jones Industrial. It trades about 0.04 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 385,500 in Itcen Co on September 26, 2024 and sell it today you would earn a total of 168,500 from holding Itcen Co or generate 43.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Itcen Co vs. Dow Jones Industrial
Performance |
| Timeline |
Itcen Co and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Itcen Co
Pair trading matchups for Itcen Co
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Itcen Co and Dow Jones
The main advantage of trading using opposite Itcen Co and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itcen Co 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.| Itcen Co vs. Hana Materials | Itcen Co vs. Daelim Trading Co | Itcen Co vs. EV Advanced Material | Itcen Co vs. DSC Investment |
| Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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