Correlation Between Beken Corp and Dow Jones
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By analyzing existing cross correlation between Beken Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Beken Corp 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 Beken Corp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beken Corp and Dow Jones.
Diversification Opportunities for Beken Corp and Dow Jones
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beken and Dow is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Beken Corp 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 Beken Corp 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 Beken Corp 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 Beken Corp i.e., Beken Corp and Dow Jones go up and down completely randomly.
Pair Corralation between Beken Corp and Dow Jones
Assuming the 90 days trading horizon Beken Corp is expected to generate 9.18 times more return on investment than Dow Jones. However, Beken Corp is 9.18 times more volatile than Dow Jones Industrial. It trades about 0.39 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of risk. If you would invest 2,678 in Beken Corp on November 7, 2024 and sell it today you would earn a total of 1,369 from holding Beken Corp or generate 51.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Beken Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Beken Corp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Beken Corp and Dow Jones
The main advantage of trading using opposite Beken Corp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beken Corp 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.The idea behind Beken Corp and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Viemed Healthcare | Dow Jones vs. Alphatec Holdings | Dow Jones vs. Tandem Diabetes Care | Dow Jones vs. Alvotech |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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