Correlation Between Cal Comp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cal Comp 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 Cal Comp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cal Comp Electronics Public and Dow Jones Industrial, you can compare the effects of market volatilities on Cal Comp 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 Cal Comp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Comp and Dow Jones.
Diversification Opportunities for Cal Comp and Dow Jones
Poor diversification
The 3 months correlation between Cal and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cal Comp Electronics Public 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 Cal Comp 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 Cal Comp Electronics Public 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 Cal Comp i.e., Cal Comp and Dow Jones go up and down completely randomly.
Pair Corralation between Cal Comp and Dow Jones
Assuming the 90 days trading horizon Cal Comp Electronics Public is expected to generate 6.88 times more return on investment than Dow Jones. However, Cal Comp is 6.88 times more volatile than Dow Jones Industrial. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.13 per unit of risk. If you would invest 182.00 in Cal Comp Electronics Public on August 29, 2024 and sell it today you would earn a total of 633.00 from holding Cal Comp Electronics Public or generate 347.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.39% |
| Values | Daily Returns |
Cal Comp Electronics Public vs. Dow Jones Industrial
Performance |
| Timeline |
Cal Comp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cal Comp Electronics Public
Pair trading matchups for Cal Comp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cal Comp and Dow Jones
The main advantage of trading using opposite Cal Comp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Comp 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.| Cal Comp vs. Hana Microelectronics Public | Cal Comp vs. KCE Electronics Public | Cal Comp vs. Dynasty Ceramic Public | Cal Comp vs. Delta Electronics Public |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |