Correlation Between Bendigo and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bendigo 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 Bendigo and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bendigo and Adelaide and Dow Jones Industrial, you can compare the effects of market volatilities on Bendigo 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 Bendigo with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Dow Jones.
Diversification Opportunities for Bendigo and Dow Jones
Poor diversification
The 3 months correlation between Bendigo and Dow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo and Adelaide 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 Bendigo 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 Bendigo and Adelaide 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 Bendigo i.e., Bendigo and Dow Jones go up and down completely randomly.
Pair Corralation between Bendigo and Dow Jones
Assuming the 90 days trading horizon Bendigo and Adelaide is expected to generate 0.86 times more return on investment than Dow Jones. However, Bendigo and Adelaide is 1.17 times less risky than Dow Jones. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 10,363 in Bendigo and Adelaide on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Bendigo and Adelaide or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bendigo and Adelaide vs. Dow Jones Industrial
Performance |
| Timeline |
Bendigo and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bendigo and Adelaide
Pair trading matchups for Bendigo
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bendigo and Dow Jones
The main advantage of trading using opposite Bendigo and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo 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.| Bendigo vs. Lendlease Group | Bendigo vs. Computershare | Bendigo vs. Charter Hall Retail | Bendigo vs. Qbe Insurance Group |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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