Correlation Between Dow Jones and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mgame Corp 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 Mgame Corp 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 Mgame Corp, you can compare the effects of market volatilities on Dow Jones and Mgame Corp 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 Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mgame Corp.
Diversification Opportunities for Dow Jones and Mgame Corp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Mgame is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp 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 Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of Dow Jones i.e., Dow Jones and Mgame Corp go up and down completely randomly.
Pair Corralation between Dow Jones and Mgame Corp
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Mgame Corp. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 2.66 times less risky than Mgame Corp. The index trades about -0.19 of its potential returns per unit of risk. The Mgame Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 514,000 in Mgame Corp on November 28, 2024 and sell it today you would lose (4,000) from holding Mgame Corp or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mgame Corp
Performance |
| Timeline |
Dow Jones and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mgame Corp
Pair trading matchups for Mgame Corp
Pair Trading with Dow Jones and Mgame Corp
The main advantage of trading using opposite Dow Jones and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mgame Corp 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| Mgame Corp vs. LG Household Healthcare | Mgame Corp vs. LG Household Healthcare | Mgame Corp vs. Ilji Technology Co | Mgame Corp vs. AeroSpace Technology of |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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