Correlation Between Dow Jones and Compania Minera
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By analyzing existing cross correlation between Dow Jones Industrial and Compania Minera Atacocha, you can compare the effects of market volatilities on Dow Jones and Compania Minera 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 Compania Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Compania Minera.
Diversification Opportunities for Dow Jones and Compania Minera
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Compania is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Compania Minera Atacocha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Minera Atacocha 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 Compania Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Minera Atacocha has no effect on the direction of Dow Jones i.e., Dow Jones and Compania Minera go up and down completely randomly.
Pair Corralation between Dow Jones and Compania Minera
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Compania Minera. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 17.49 times less risky than Compania Minera. The index trades about -0.02 of its potential returns per unit of risk. The Compania Minera Atacocha is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4.80 in Compania Minera Atacocha on September 12, 2024 and sell it today you would lose (0.10) from holding Compania Minera Atacocha or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Compania Minera Atacocha
Performance |
| Timeline |
Dow Jones and Compania Minera Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Compania Minera Atacocha
Pair trading matchups for Compania Minera
Pair Trading with Dow Jones and Compania Minera
The main advantage of trading using opposite Dow Jones and Compania Minera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Compania Minera 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 Compania Minera will offset losses from the drop in Compania Minera's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Compania Minera vs. Nexa Resources Peru | Compania Minera vs. Citigroup | Compania Minera vs. Compania de Minas | Compania Minera vs. Compania Minera Poderosa |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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