Correlation Between Dow Jones and Blockchain Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Blockchain Group 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 Blockchain Group 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 Blockchain Group SA, you can compare the effects of market volatilities on Dow Jones and Blockchain Group 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 Blockchain Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Blockchain Group.
Diversification Opportunities for Dow Jones and Blockchain Group
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Blockchain is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Blockchain Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Group 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 Blockchain Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Group has no effect on the direction of Dow Jones i.e., Dow Jones and Blockchain Group go up and down completely randomly.
Pair Corralation between Dow Jones and Blockchain Group
Assuming the 90 days trading horizon Dow Jones is expected to generate 16.38 times less return on investment than Blockchain Group. But when comparing it to its historical volatility, Dow Jones Industrial is 10.72 times less risky than Blockchain Group. It trades about 0.24 of its potential returns per unit of risk. Blockchain Group SA is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Blockchain Group SA on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Blockchain Group SA or generate 107.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Blockchain Group SA
Performance |
| Timeline |
Dow Jones and Blockchain Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Blockchain Group SA
Pair trading matchups for Blockchain Group
Pair Trading with Dow Jones and Blockchain Group
The main advantage of trading using opposite Dow Jones and Blockchain Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Blockchain Group 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 Blockchain Group will offset losses from the drop in Blockchain Group'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 |
| Blockchain Group vs. FNP Technologies SA | Blockchain Group vs. Manitou BF SA | Blockchain Group vs. Ossiam Minimum Variance | Blockchain Group vs. Granite 3x LVMH |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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