Correlation Between Dow Jones and Genic
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Genic 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 Genic 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 Genic Co, you can compare the effects of market volatilities on Dow Jones and Genic 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 Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Genic.
Diversification Opportunities for Dow Jones and Genic
Excellent diversification
The 3 months correlation between Dow and Genic is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic 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 Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of Dow Jones i.e., Dow Jones and Genic go up and down completely randomly.
Pair Corralation between Dow Jones and Genic
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Genic. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 5.8 times less risky than Genic. The index trades about -0.27 of its potential returns per unit of risk. The Genic Co is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,934,000 in Genic Co on October 13, 2024 and sell it today you would earn a total of 781,000 from holding Genic Co or generate 40.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Genic Co
Performance |
| Timeline |
Dow Jones and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Genic Co
Pair trading matchups for Genic
Pair Trading with Dow Jones and Genic
The main advantage of trading using opposite Dow Jones and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| Dow Jones vs. BRP Inc | Dow Jones vs. Magnite | Dow Jones vs. Integral Ad Science | Dow Jones vs. Global E Online |
| Genic vs. Nh Investment And | Genic vs. DB Financial Investment | Genic vs. Korean Drug Co | Genic vs. NH Investment Securities |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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