Correlation Between Brooge Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Brooge Holdings 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 Brooge Holdings and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brooge Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on Brooge Holdings 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 Brooge Holdings with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooge Holdings and Dow Jones.
Diversification Opportunities for Brooge Holdings and Dow Jones
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brooge and Dow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Holdings 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 Brooge Holdings 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 Brooge Holdings 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 Brooge Holdings i.e., Brooge Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between Brooge Holdings and Dow Jones
Given the investment horizon of 90 days Brooge Holdings is expected to under-perform the Dow Jones. In addition to that, Brooge Holdings is 7.79 times more volatile than Dow Jones Industrial. It trades about -0.18 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 4,292,489 in Dow Jones Industrial on August 23, 2024 and sell it today you would earn a total of 94,546 from holding Dow Jones Industrial or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brooge Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
Brooge Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Brooge Holdings
Pair trading matchups for Brooge Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Brooge Holdings and Dow Jones
The main advantage of trading using opposite Brooge Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooge Holdings 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.| Brooge Holdings vs. MPLX LP | Brooge Holdings vs. Western Midstream Partners | Brooge Holdings vs. Plains All American | Brooge Holdings vs. Antero Midstream Partners |
| Dow Jones vs. Barrick Gold Corp | Dow Jones vs. Jutal Offshore Oil | Dow Jones vs. Eastern Co | Dow Jones vs. Weyco Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |