Correlation Between Century Iron and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Century Iron 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 Century Iron and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Dow Jones Industrial, you can compare the effects of market volatilities on Century Iron 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 Century Iron with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Dow Jones.
Diversification Opportunities for Century Iron and Dow Jones
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Century and Dow is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And 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 Century Iron 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 Century Iron And 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 Century Iron i.e., Century Iron and Dow Jones go up and down completely randomly.
Pair Corralation between Century Iron and Dow Jones
Assuming the 90 days trading horizon Century Iron And is expected to generate 5.14 times more return on investment than Dow Jones. However, Century Iron is 5.14 times more volatile than Dow Jones Industrial. It trades about 0.03 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 16,600 in Century Iron And on August 26, 2024 and sell it today you would earn a total of 1,450 from holding Century Iron And or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Century Iron And vs. Dow Jones Industrial
Performance |
| Timeline |
Century Iron and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Century Iron And
Pair trading matchups for Century Iron
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Century Iron and Dow Jones
The main advantage of trading using opposite Century Iron and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron 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.| Century Iron vs. Cheng Shin Rubber | Century Iron vs. Taiwan Cement Corp | Century Iron vs. China Steel Chemical | Century Iron vs. Yulon Motor Co |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 CEOs Directory module to screen CEOs from public companies around the world.
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