Correlation Between Data Modul and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Data Modul 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 Data Modul and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data Modul AG and Dow Jones Industrial, you can compare the effects of market volatilities on Data Modul 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 Data Modul with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and Dow Jones.
Diversification Opportunities for Data Modul and Dow Jones
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Data and Dow is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul 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 Data Modul 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 Data Modul 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 Data Modul i.e., Data Modul and Dow Jones go up and down completely randomly.
Pair Corralation between Data Modul and Dow Jones
Assuming the 90 days trading horizon Data Modul AG is expected to generate 3.47 times more return on investment than Dow Jones. However, Data Modul is 3.47 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 -0.22 per unit of risk. If you would invest 2,720 in Data Modul AG on October 11, 2024 and sell it today you would lose (60.00) from holding Data Modul AG or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Data Modul AG vs. Dow Jones Industrial
Performance |
| Timeline |
Data Modul and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Data Modul AG
Pair trading matchups for Data Modul
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Data Modul and Dow Jones
The main advantage of trading using opposite Data Modul and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Modul 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.| Data Modul vs. SEI INVESTMENTS | Data Modul vs. JD SPORTS FASH | Data Modul vs. NTG Nordic Transport | Data Modul vs. WisdomTree Investments |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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