Correlation Between Groupe LDLC and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Groupe LDLC 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 Groupe LDLC and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe LDLC SA and Dow Jones Industrial, you can compare the effects of market volatilities on Groupe LDLC 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 Groupe LDLC with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe LDLC and Dow Jones.
Diversification Opportunities for Groupe LDLC and Dow Jones
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Groupe and Dow is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Groupe LDLC 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 Groupe LDLC 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 Groupe LDLC 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 Groupe LDLC i.e., Groupe LDLC and Dow Jones go up and down completely randomly.
Pair Corralation between Groupe LDLC and Dow Jones
Assuming the 90 days trading horizon Groupe LDLC SA is expected to under-perform the Dow Jones. In addition to that, Groupe LDLC is 3.44 times more volatile than Dow Jones Industrial. It trades about -0.37 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Groupe LDLC SA vs. Dow Jones Industrial
Performance |
| Timeline |
Groupe LDLC and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Groupe LDLC SA
Pair trading matchups for Groupe LDLC
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Groupe LDLC and Dow Jones
The main advantage of trading using opposite Groupe LDLC and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe LDLC 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.| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs SA |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |