Correlation Between CAFCA and Dow Jones
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By analyzing existing cross correlation between CAFCA LIMITED and Dow Jones Industrial, you can compare the effects of market volatilities on CAFCA 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 CAFCA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAFCA and Dow Jones.
Diversification Opportunities for CAFCA and Dow Jones
Very weak diversification
The 3 months correlation between CAFCA and Dow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CAFCA LIMITED 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 CAFCA 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 CAFCA LIMITED 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 CAFCA i.e., CAFCA and Dow Jones go up and down completely randomly.
Pair Corralation between CAFCA and Dow Jones
Assuming the 90 days trading horizon CAFCA LIMITED is expected to generate 4.47 times more return on investment than Dow Jones. However, CAFCA is 4.47 times more volatile than Dow Jones Industrial. It trades about 0.31 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of risk. If you would invest 156,000 in CAFCA LIMITED on August 31, 2024 and sell it today you would earn a total of 49,000 from holding CAFCA LIMITED or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAFCA LIMITED vs. Dow Jones Industrial
Performance |
| Timeline |
CAFCA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CAFCA LIMITED
Pair trading matchups for CAFCA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CAFCA and Dow Jones
The main advantage of trading using opposite CAFCA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAFCA 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.| CAFCA vs. STAR AFRICA PORATION | CAFCA vs. FIRST MUTUAL PROPERTIES | CAFCA vs. AFRICAN DISTILLERS LIMITED | CAFCA vs. TANGANDA TEA PANY |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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