Correlation Between GECI International and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GECI International 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 GECI International and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GECI International SA and Dow Jones Industrial, you can compare the effects of market volatilities on GECI International 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 GECI International with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GECI International and Dow Jones.
Diversification Opportunities for GECI International and Dow Jones
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GECI and Dow is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GECI International SA 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 GECI International 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 GECI International SA 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 GECI International i.e., GECI International and Dow Jones go up and down completely randomly.
Pair Corralation between GECI International and Dow Jones
Assuming the 90 days trading horizon GECI International SA is expected to generate 18.51 times more return on investment than Dow Jones. However, GECI International is 18.51 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 200.00 in GECI International SA on September 12, 2024 and sell it today you would earn a total of 75.00 from holding GECI International SA or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
GECI International SA vs. Dow Jones Industrial
Performance |
| Timeline |
GECI International and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GECI International SA
Pair trading matchups for GECI International
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GECI International and Dow Jones
The main advantage of trading using opposite GECI International and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GECI International 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.| GECI International vs. Europlasma SA | GECI International vs. Archos | GECI International vs. Auplata SA | GECI International vs. DBT SA |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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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