Correlation Between Masterwork Machinery and Dow Jones
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By analyzing existing cross correlation between Masterwork Machinery and Dow Jones Industrial, you can compare the effects of market volatilities on Masterwork Machinery 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 Masterwork Machinery with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masterwork Machinery and Dow Jones.
Diversification Opportunities for Masterwork Machinery and Dow Jones
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Masterwork and Dow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Masterwork Machinery 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 Masterwork Machinery 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 Masterwork Machinery 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 Masterwork Machinery i.e., Masterwork Machinery and Dow Jones go up and down completely randomly.
Pair Corralation between Masterwork Machinery and Dow Jones
Assuming the 90 days trading horizon Masterwork Machinery is expected to generate 6.12 times more return on investment than Dow Jones. However, Masterwork Machinery is 6.12 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 563.00 in Masterwork Machinery on August 29, 2024 and sell it today you would earn a total of 46.00 from holding Masterwork Machinery or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Masterwork Machinery vs. Dow Jones Industrial
Performance |
| Timeline |
Masterwork Machinery and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Masterwork Machinery
Pair trading matchups for Masterwork Machinery
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Masterwork Machinery and Dow Jones
The main advantage of trading using opposite Masterwork Machinery and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masterwork Machinery 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.| Masterwork Machinery vs. Biwin Storage Technology | Masterwork Machinery vs. PetroChina Co Ltd | Masterwork Machinery vs. Industrial and Commercial | Masterwork Machinery vs. China Construction Bank |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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