Correlation Between Cicor Technologies and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cicor Technologies 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 Cicor Technologies and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cicor Technologies and Dow Jones Industrial, you can compare the effects of market volatilities on Cicor Technologies 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 Cicor Technologies with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cicor Technologies and Dow Jones.
Diversification Opportunities for Cicor Technologies and Dow Jones
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cicor and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cicor Technologies 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 Cicor Technologies 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 Cicor Technologies 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 Cicor Technologies i.e., Cicor Technologies and Dow Jones go up and down completely randomly.
Pair Corralation between Cicor Technologies and Dow Jones
Assuming the 90 days trading horizon Cicor Technologies is expected to generate 1.96 times more return on investment than Dow Jones. However, Cicor Technologies is 1.96 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 5,100 in Cicor Technologies on August 25, 2024 and sell it today you would earn a total of 600.00 from holding Cicor Technologies or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.97% |
| Values | Daily Returns |
Cicor Technologies vs. Dow Jones Industrial
Performance |
| Timeline |
Cicor Technologies and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cicor Technologies
Pair trading matchups for Cicor Technologies
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cicor Technologies and Dow Jones
The main advantage of trading using opposite Cicor Technologies and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cicor Technologies 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.| Cicor Technologies vs. Comet Holding AG | Cicor Technologies vs. Also Holding AG | Cicor Technologies vs. Komax Holding AG | Cicor Technologies vs. Bucher Industries AG |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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