Correlation Between Kko International and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kko 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 Kko 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 Kko International SA and Dow Jones Industrial, you can compare the effects of market volatilities on Kko 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 Kko International with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kko International and Dow Jones.
Diversification Opportunities for Kko International and Dow Jones
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kko and Dow is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kko 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 Kko 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 Kko 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 Kko International i.e., Kko International and Dow Jones go up and down completely randomly.
Pair Corralation between Kko International and Dow Jones
Assuming the 90 days trading horizon Kko International SA is expected to generate 10.85 times more return on investment than Dow Jones. However, Kko International is 10.85 times more volatile than Dow Jones Industrial. It trades about 0.04 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 9.40 in Kko International SA on August 26, 2024 and sell it today you would earn a total of 1.60 from holding Kko International SA or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Kko International SA vs. Dow Jones Industrial
Performance |
| Timeline |
Kko International and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kko International SA
Pair trading matchups for Kko International
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kko International and Dow Jones
The main advantage of trading using opposite Kko International and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kko 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.| Kko International vs. Agrogeneration | Kko International vs. Manitou BF SA | Kko International vs. Ossiam Minimum Variance | Kko International vs. Granite 3x LVMH |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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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