Correlation Between Coltene Holding and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Coltene Holding 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 Coltene Holding and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coltene Holding AG and Dow Jones Industrial, you can compare the effects of market volatilities on Coltene Holding 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 Coltene Holding with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coltene Holding and Dow Jones.
Diversification Opportunities for Coltene Holding and Dow Jones
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coltene and Dow is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Coltene Holding AG 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 Coltene Holding 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 Coltene Holding AG 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 Coltene Holding i.e., Coltene Holding and Dow Jones go up and down completely randomly.
Pair Corralation between Coltene Holding and Dow Jones
Assuming the 90 days trading horizon Coltene Holding AG is expected to under-perform the Dow Jones. In addition to that, Coltene Holding is 2.22 times more volatile than Dow Jones Industrial. It trades about -0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.04 per unit of volatility. If you would invest 3,409,816 in Dow Jones Industrial on January 17, 2025 and sell it today you would earn a total of 557,123 from holding Dow Jones Industrial or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Coltene Holding AG vs. Dow Jones Industrial
Performance |
| Timeline |
Coltene Holding and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Coltene Holding AG
Pair trading matchups for Coltene Holding
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Coltene Holding and Dow Jones
The main advantage of trading using opposite Coltene Holding and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coltene Holding 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.| Coltene Holding vs. Comet Holding AG | Coltene Holding vs. Inficon Holding | Coltene Holding vs. Siegfried Holding | Coltene Holding vs. Bucher Industries AG |
| Dow Jones vs. Bowhead Specialty Holdings | Dow Jones vs. Unum Group | Dow Jones vs. Grupo Aeroportuario del | Dow Jones vs. Air Lease |
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 CEOs Directory module to screen CEOs from public companies around the world.
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