Correlation Between Dow Jones and EURASIAN MINERALS
Can any of the company-specific risk be diversified away by investing in both Dow Jones and EURASIAN MINERALS 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 EURASIAN MINERALS 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 EURASIAN MINERALS, you can compare the effects of market volatilities on Dow Jones and EURASIAN MINERALS 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 EURASIAN MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and EURASIAN MINERALS.
Diversification Opportunities for Dow Jones and EURASIAN MINERALS
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and EURASIAN is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and EURASIAN MINERALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EURASIAN MINERALS 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 EURASIAN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EURASIAN MINERALS has no effect on the direction of Dow Jones i.e., Dow Jones and EURASIAN MINERALS go up and down completely randomly.
Pair Corralation between Dow Jones and EURASIAN MINERALS
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.42 times more return on investment than EURASIAN MINERALS. However, Dow Jones Industrial is 2.39 times less risky than EURASIAN MINERALS. It trades about 0.07 of its potential returns per unit of risk. EURASIAN MINERALS is currently generating about 0.0 per unit of risk. If you would invest 3,322,080 in Dow Jones Industrial on September 19, 2024 and sell it today you would earn a total of 910,607 from holding Dow Jones Industrial or generate 27.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Dow Jones Industrial vs. EURASIAN MINERALS
Performance |
| Timeline |
Dow Jones and EURASIAN MINERALS Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
EURASIAN MINERALS
Pair trading matchups for EURASIAN MINERALS
Pair Trading with Dow Jones and EURASIAN MINERALS
The main advantage of trading using opposite Dow Jones and EURASIAN MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, EURASIAN MINERALS 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 EURASIAN MINERALS will offset losses from the drop in EURASIAN MINERALS's long position.| Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
| EURASIAN MINERALS vs. MeVis Medical Solutions | EURASIAN MINERALS vs. Goosehead Insurance | EURASIAN MINERALS vs. Insurance Australia Group | EURASIAN MINERALS vs. AVITA Medical |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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