Correlation Between Implanet and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Implanet 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 Implanet and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Implanet SA and Dow Jones Industrial, you can compare the effects of market volatilities on Implanet 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 Implanet with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implanet and Dow Jones.
Diversification Opportunities for Implanet and Dow Jones
Weak diversification
The 3 months correlation between Implanet and Dow is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Implanet 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 Implanet 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 Implanet 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 Implanet i.e., Implanet and Dow Jones go up and down completely randomly.
Pair Corralation between Implanet and Dow Jones
Assuming the 90 days trading horizon Implanet SA is expected to generate 6.98 times more return on investment than Dow Jones. However, Implanet is 6.98 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 11.00 in Implanet SA on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Implanet SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Implanet SA vs. Dow Jones Industrial
Performance |
| Timeline |
Implanet and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Implanet SA
Pair trading matchups for Implanet
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Implanet and Dow Jones
The main advantage of trading using opposite Implanet and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implanet 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 Implanet SA 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. 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |