Correlation Between Dow Jones and Cambiar Aggressive
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Cambiar Aggressive 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 Cambiar Aggressive 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 Cambiar Aggressive Value, you can compare the effects of market volatilities on Dow Jones and Cambiar Aggressive 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 Cambiar Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Cambiar Aggressive.
Diversification Opportunities for Dow Jones and Cambiar Aggressive
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Cambiar is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Cambiar Aggressive Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Aggressive Value 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 Cambiar Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Aggressive Value has no effect on the direction of Dow Jones i.e., Dow Jones and Cambiar Aggressive go up and down completely randomly.
Pair Corralation between Dow Jones and Cambiar Aggressive
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.38 times more return on investment than Cambiar Aggressive. However, Dow Jones is 1.38 times more volatile than Cambiar Aggressive Value. It trades about 0.37 of its potential returns per unit of risk. Cambiar Aggressive Value is currently generating about 0.3 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Cambiar Aggressive Value
Performance |
| Timeline |
Dow Jones and Cambiar Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Cambiar Aggressive Value
Pair trading matchups for Cambiar Aggressive
Pair Trading with Dow Jones and Cambiar Aggressive
The main advantage of trading using opposite Dow Jones and Cambiar Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Cambiar Aggressive 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 Cambiar Aggressive will offset losses from the drop in Cambiar Aggressive's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Cambiar Aggressive vs. iShares Core SP | Cambiar Aggressive vs. iShares Core MSCI | Cambiar Aggressive vs. iShares Broad USD | Cambiar Aggressive vs. iShares Core SP |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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