Correlation Between Marisa Lojas and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Marisa Lojas 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 Marisa Lojas and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marisa Lojas SA and Dow Jones Industrial, you can compare the effects of market volatilities on Marisa Lojas 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 Marisa Lojas with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marisa Lojas and Dow Jones.
Diversification Opportunities for Marisa Lojas and Dow Jones
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marisa and Dow is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Marisa Lojas 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 Marisa Lojas 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 Marisa Lojas 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 Marisa Lojas i.e., Marisa Lojas and Dow Jones go up and down completely randomly.
Pair Corralation between Marisa Lojas and Dow Jones
Assuming the 90 days trading horizon Marisa Lojas SA is expected to generate 26.06 times more return on investment than Dow Jones. However, Marisa Lojas is 26.06 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 0.09 per unit of risk. If you would invest 675.00 in Marisa Lojas SA on August 31, 2024 and sell it today you would lose (584.00) from holding Marisa Lojas SA or give up 86.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.38% |
| Values | Daily Returns |
Marisa Lojas SA vs. Dow Jones Industrial
Performance |
| Timeline |
Marisa Lojas and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Marisa Lojas SA
Pair trading matchups for Marisa Lojas
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Marisa Lojas and Dow Jones
The main advantage of trading using opposite Marisa Lojas and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marisa Lojas 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.| Marisa Lojas vs. Lojas Renner SA | Marisa Lojas vs. Guararapes Confeces SA | Marisa Lojas vs. CA Modas SA | Marisa Lojas vs. Minerva SA |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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