Correlation Between CIG Pannonia and Dow Jones
Can any of the company-specific risk be diversified away by investing in both CIG Pannonia 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 CIG Pannonia and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIG Pannonia Life and Dow Jones Industrial, you can compare the effects of market volatilities on CIG Pannonia 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 CIG Pannonia with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIG Pannonia and Dow Jones.
Diversification Opportunities for CIG Pannonia and Dow Jones
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIG and Dow is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CIG Pannonia Life 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 CIG Pannonia 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 CIG Pannonia Life 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 CIG Pannonia i.e., CIG Pannonia and Dow Jones go up and down completely randomly.
Pair Corralation between CIG Pannonia and Dow Jones
Assuming the 90 days trading horizon CIG Pannonia Life is expected to generate 1.6 times more return on investment than Dow Jones. However, CIG Pannonia is 1.6 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 34,500 in CIG Pannonia Life on August 27, 2024 and sell it today you would earn a total of 1,900 from holding CIG Pannonia Life or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CIG Pannonia Life vs. Dow Jones Industrial
Performance |
| Timeline |
CIG Pannonia and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CIG Pannonia Life
Pair trading matchups for CIG Pannonia
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CIG Pannonia and Dow Jones
The main advantage of trading using opposite CIG Pannonia and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIG Pannonia 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.| CIG Pannonia vs. Appeninn Nyrt | CIG Pannonia vs. Raba Jarmuipari Holding | CIG Pannonia vs. NordTelekom Telecommunications Service | CIG Pannonia vs. OPUS GLOBAL Nyrt |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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