Correlation Between Traton SE and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Traton SE 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 Traton SE and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Traton SE and Dow Jones Industrial, you can compare the effects of market volatilities on Traton SE 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 Traton SE with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Traton SE and Dow Jones.
Diversification Opportunities for Traton SE and Dow Jones
Very weak diversification
The 3 months correlation between Traton and Dow is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Traton SE 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 Traton SE 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 Traton SE 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 Traton SE i.e., Traton SE and Dow Jones go up and down completely randomly.
Pair Corralation between Traton SE and Dow Jones
Assuming the 90 days trading horizon Traton SE is expected to generate 2.67 times more return on investment than Dow Jones. However, Traton SE is 2.67 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 21,750 in Traton SE on August 31, 2024 and sell it today you would earn a total of 11,250 from holding Traton SE or generate 51.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Traton SE vs. Dow Jones Industrial
Performance |
| Timeline |
Traton SE and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Traton SE
Pair trading matchups for Traton SE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Traton SE and Dow Jones
The main advantage of trading using opposite Traton SE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Traton SE 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.| Traton SE vs. Doxa AB | Traton SE vs. Cortus Energy AB | Traton SE vs. Online Brands Nordic | Traton SE vs. NetJobs Group AB |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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