Correlation Between Capital Engineering and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Capital Engineering 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 Capital Engineering and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Engineering Network and Dow Jones Industrial, you can compare the effects of market volatilities on Capital Engineering 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 Capital Engineering with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Engineering and Dow Jones.
Diversification Opportunities for Capital Engineering and Dow Jones
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capital and Dow is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Capital Engineering Network 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 Capital Engineering 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 Capital Engineering Network 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 Capital Engineering i.e., Capital Engineering and Dow Jones go up and down completely randomly.
Pair Corralation between Capital Engineering and Dow Jones
Assuming the 90 days trading horizon Capital Engineering Network is expected to generate 93.28 times more return on investment than Dow Jones. However, Capital Engineering is 93.28 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 260.00 in Capital Engineering Network on August 26, 2024 and sell it today you would lose (60.00) from holding Capital Engineering Network or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.39% |
| Values | Daily Returns |
Capital Engineering Network vs. Dow Jones Industrial
Performance |
| Timeline |
Capital Engineering and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Capital Engineering Network
Pair trading matchups for Capital Engineering
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Capital Engineering and Dow Jones
The main advantage of trading using opposite Capital Engineering and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Engineering 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.| Capital Engineering vs. PTT Public | Capital Engineering vs. PTT Exploration and | Capital Engineering vs. CP ALL Public | Capital Engineering vs. Kasikornbank Public |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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