Correlation Between Dow Jones and BankInvest Lange
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By analyzing existing cross correlation between Dow Jones Industrial and BankInvest Lange Danske, you can compare the effects of market volatilities on Dow Jones and BankInvest Lange 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 BankInvest Lange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BankInvest Lange.
Diversification Opportunities for Dow Jones and BankInvest Lange
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and BankInvest is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and BankInvest Lange Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Lange Danske 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 BankInvest Lange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Lange Danske has no effect on the direction of Dow Jones i.e., Dow Jones and BankInvest Lange go up and down completely randomly.
Pair Corralation between Dow Jones and BankInvest Lange
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 4.12 times more return on investment than BankInvest Lange. However, Dow Jones is 4.12 times more volatile than BankInvest Lange Danske. It trades about 0.22 of its potential returns per unit of risk. BankInvest Lange Danske is currently generating about 0.18 per unit of risk. If you would invest 3,899,766 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 570,787 from holding Dow Jones Industrial or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.7% |
| Values | Daily Returns |
Dow Jones Industrial vs. BankInvest Lange Danske
Performance |
| Timeline |
Dow Jones and BankInvest Lange Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BankInvest Lange Danske
Pair trading matchups for BankInvest Lange
Pair Trading with Dow Jones and BankInvest Lange
The main advantage of trading using opposite Dow Jones and BankInvest Lange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BankInvest Lange 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 BankInvest Lange will offset losses from the drop in BankInvest Lange's long position.| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
| BankInvest Lange vs. Jyske Invest Nye | BankInvest Lange vs. Jyske Invest Korte | BankInvest Lange vs. Jyske Invest Nye | BankInvest Lange vs. Jyske Invest Virksomhedsobligationer |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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