Correlation Between Dow Jones and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Camus Engineering 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 Dow Jones and Camus Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Camus Engineering Construction, you can compare the effects of market volatilities on Dow Jones and Camus Engineering 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 Dow Jones with a short position of Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Camus Engineering.
Diversification Opportunities for Dow Jones and Camus Engineering
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Camus is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Dow Jones i.e., Dow Jones and Camus Engineering go up and down completely randomly.
Pair Corralation between Dow Jones and Camus Engineering
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.49 times more return on investment than Camus Engineering. However, Dow Jones Industrial is 2.06 times less risky than Camus Engineering. It trades about 0.1 of its potential returns per unit of risk. Camus Engineering Construction is currently generating about -0.07 per unit of risk. If you would invest 3,897,241 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 532,410 from holding Dow Jones Industrial or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.79% |
| Values | Daily Returns |
Dow Jones Industrial vs. Camus Engineering Construction
Performance |
| Timeline |
Dow Jones and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Camus Engineering Construction
Pair trading matchups for Camus Engineering
Pair Trading with Dow Jones and Camus Engineering
The main advantage of trading using opposite Dow Jones and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Camus Engineering vs. Hyundai Engineering Construction | Camus Engineering vs. KEPCO Engineering Construction | Camus Engineering vs. Kolon Globalco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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