Correlation Between Bank of Queensland and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland 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 Bank of Queensland and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Dow Jones Industrial, you can compare the effects of market volatilities on Bank of Queensland 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 Bank of Queensland with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Dow Jones.
Diversification Opportunities for Bank of Queensland and Dow Jones
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Dow is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland i.e., Bank of Queensland and Dow Jones go up and down completely randomly.
Pair Corralation between Bank of Queensland and Dow Jones
Assuming the 90 days trading horizon Bank of Queensland is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Queensland is 3.75 times less risky than Dow Jones. The stock trades about -0.03 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of Queensland vs. Dow Jones Industrial
Performance |
| Timeline |
Bank of Queensland and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bank of Queensland
Pair trading matchups for Bank of Queensland
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bank of Queensland and Dow Jones
The main advantage of trading using opposite Bank of Queensland and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland 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.| Bank of Queensland vs. Imricor Medical Systems | Bank of Queensland vs. Midway | Bank of Queensland vs. Aristocrat Leisure | Bank of Queensland vs. iShares Global Healthcare |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |