Correlation Between Eagle High and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eagle High 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 Eagle High and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle High Plantations and Dow Jones Industrial, you can compare the effects of market volatilities on Eagle High 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 Eagle High with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle High and Dow Jones.
Diversification Opportunities for Eagle High and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eagle High Plantations 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 Eagle High 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 Eagle High Plantations 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 Eagle High i.e., Eagle High and Dow Jones go up and down completely randomly.
Pair Corralation between Eagle High and Dow Jones
Assuming the 90 days trading horizon Eagle High is expected to generate 56.3 times less return on investment than Dow Jones. In addition to that, Eagle High is 2.82 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,394,710 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.56% |
| Values | Daily Returns |
Eagle High Plantations vs. Dow Jones Industrial
Performance |
| Timeline |
Eagle High and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eagle High Plantations
Pair trading matchups for Eagle High
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eagle High and Dow Jones
The main advantage of trading using opposite Eagle High and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle High 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.| Eagle High vs. Perusahaan Perkebunan London | Eagle High vs. Salim Ivomas Pratama | Eagle High vs. Alam Sutera Realty | Eagle High vs. Delta Dunia Makmur |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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