Correlation Between BillerudKorsns and Dow Jones
Can any of the company-specific risk be diversified away by investing in both BillerudKorsns 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 BillerudKorsns and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BillerudKorsns AB and Dow Jones Industrial, you can compare the effects of market volatilities on BillerudKorsns 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 BillerudKorsns with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BillerudKorsns and Dow Jones.
Diversification Opportunities for BillerudKorsns and Dow Jones
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BillerudKorsns and Dow is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BillerudKorsns AB 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 BillerudKorsns 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 BillerudKorsns AB 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 BillerudKorsns i.e., BillerudKorsns and Dow Jones go up and down completely randomly.
Pair Corralation between BillerudKorsns and Dow Jones
Assuming the 90 days horizon BillerudKorsns AB is expected to generate 12.11 times more return on investment than Dow Jones. However, BillerudKorsns is 12.11 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.07 per unit of risk. If you would invest 1,250 in BillerudKorsns AB on October 9, 2024 and sell it today you would lose (335.00) from holding BillerudKorsns AB or give up 26.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.94% |
| Values | Daily Returns |
BillerudKorsns AB vs. Dow Jones Industrial
Performance |
| Timeline |
BillerudKorsns and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BillerudKorsns AB
Pair trading matchups for BillerudKorsns
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BillerudKorsns and Dow Jones
The main advantage of trading using opposite BillerudKorsns and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BillerudKorsns 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.| BillerudKorsns vs. Canfor Pulp Products | BillerudKorsns vs. Mondi PLC ADR | BillerudKorsns vs. Nine Dragons Paper | BillerudKorsns vs. Klabin Sa A |
| Dow Jones vs. Apogee Therapeutics, Common | Dow Jones vs. Spyre Therapeutics | Dow Jones vs. Lion One Metals | Dow Jones vs. Vulcan Materials |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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