Correlation Between Cognios Large and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cognios Large 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 Cognios Large and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognios Large Cap and Dow Jones Industrial, you can compare the effects of market volatilities on Cognios Large 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 Cognios Large with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognios Large and Dow Jones.
Diversification Opportunities for Cognios Large and Dow Jones
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cognios and Dow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cognios Large Cap 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 Cognios Large 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 Cognios Large Cap 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 Cognios Large i.e., Cognios Large and Dow Jones go up and down completely randomly.
Pair Corralation between Cognios Large and Dow Jones
If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Cognios Large Cap vs. Dow Jones Industrial
Performance |
| Timeline |
Cognios Large and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cognios Large Cap
Pair trading matchups for Cognios Large
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cognios Large and Dow Jones
The main advantage of trading using opposite Cognios Large and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognios Large 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.| Cognios Large vs. Schwartz Value Focused | Cognios Large vs. Centre American Select | Cognios Large vs. Dreyfus Natural Resources | Cognios Large vs. Kinetics Small Cap |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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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