Correlation Between NBTM New and Dow Jones
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By analyzing existing cross correlation between NBTM New Materials and Dow Jones Industrial, you can compare the effects of market volatilities on NBTM New 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 NBTM New with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBTM New and Dow Jones.
Diversification Opportunities for NBTM New and Dow Jones
Good diversification
The 3 months correlation between NBTM and Dow is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NBTM New Materials 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 NBTM New 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 NBTM New Materials 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 NBTM New i.e., NBTM New and Dow Jones go up and down completely randomly.
Pair Corralation between NBTM New and Dow Jones
Assuming the 90 days trading horizon NBTM New Materials is expected to generate 4.39 times more return on investment than Dow Jones. However, NBTM New is 4.39 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 1,340 in NBTM New Materials on October 18, 2024 and sell it today you would earn a total of 317.00 from holding NBTM New Materials or generate 23.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.31% |
| Values | Daily Returns |
NBTM New Materials vs. Dow Jones Industrial
Performance |
| Timeline |
NBTM New and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
NBTM New Materials
Pair trading matchups for NBTM New
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NBTM New and Dow Jones
The main advantage of trading using opposite NBTM New and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBTM New 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.| NBTM New vs. Will Semiconductor Co | NBTM New vs. Nexchip Semiconductor Corp | NBTM New vs. Union Semiconductor Co | NBTM New vs. Shanghai V Test Semiconductor |
| Dow Jones vs. JD Sports Fashion | Dow Jones vs. Titan Machinery | Dow Jones vs. Canlan Ice Sports | Dow Jones vs. Playa Hotels Resorts |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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