Correlation Between Omer Decugis and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Omer Decugis 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 Omer Decugis and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omer Decugis Cie and Dow Jones Industrial, you can compare the effects of market volatilities on Omer Decugis 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 Omer Decugis with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omer Decugis and Dow Jones.
Diversification Opportunities for Omer Decugis and Dow Jones
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omer and Dow is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Omer Decugis Cie 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 Omer Decugis 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 Omer Decugis Cie 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 Omer Decugis i.e., Omer Decugis and Dow Jones go up and down completely randomly.
Pair Corralation between Omer Decugis and Dow Jones
Assuming the 90 days trading horizon Omer Decugis is expected to generate 39.0 times less return on investment than Dow Jones. In addition to that, Omer Decugis is 2.95 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.16% |
| Values | Daily Returns |
Omer Decugis Cie vs. Dow Jones Industrial
Performance |
| Timeline |
Omer Decugis and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Omer Decugis Cie
Pair trading matchups for Omer Decugis
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Omer Decugis and Dow Jones
The main advantage of trading using opposite Omer Decugis and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omer Decugis 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.| Omer Decugis vs. LVMH Mot Hennessy | Omer Decugis vs. LOreal SA | Omer Decugis vs. Hermes International SCA | Omer Decugis vs. Manitou BF SA |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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