Correlation Between Climb Bio and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Climb Bio 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 Climb Bio and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Climb Bio and Dow Jones Industrial, you can compare the effects of market volatilities on Climb Bio 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 Climb Bio with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Climb Bio and Dow Jones.
Diversification Opportunities for Climb Bio and Dow Jones
Pay attention - limited upside
The 3 months correlation between Climb and Dow is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Climb Bio 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 Climb Bio 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 Climb Bio 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 Climb Bio i.e., Climb Bio and Dow Jones go up and down completely randomly.
Pair Corralation between Climb Bio and Dow Jones
Given the investment horizon of 90 days Climb Bio is expected to generate 9.24 times more return on investment than Dow Jones. However, Climb Bio is 9.24 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 255.00 in Climb Bio on August 31, 2024 and sell it today you would earn a total of 67.00 from holding Climb Bio or generate 26.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Climb Bio vs. Dow Jones Industrial
Performance |
| Timeline |
Climb Bio and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Climb Bio
Pair trading matchups for Climb Bio
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Climb Bio and Dow Jones
The main advantage of trading using opposite Climb Bio and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Climb Bio 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.| Climb Bio vs. Algoma Steel Group | Climb Bio vs. CECO Environmental Corp | Climb Bio vs. Insteel Industries | Climb Bio vs. Allegiant Travel |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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