Correlation Between Dow Jones and Careium AB
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Careium AB 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 Careium AB 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 Careium AB, you can compare the effects of market volatilities on Dow Jones and Careium AB 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 Careium AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Careium AB.
Diversification Opportunities for Dow Jones and Careium AB
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Careium is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Careium AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Careium AB 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 Careium AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Careium AB has no effect on the direction of Dow Jones i.e., Dow Jones and Careium AB go up and down completely randomly.
Pair Corralation between Dow Jones and Careium AB
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.63 times less return on investment than Careium AB. But when comparing it to its historical volatility, Dow Jones Industrial is 3.76 times less risky than Careium AB. It trades about 0.09 of its potential returns per unit of risk. Careium AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,460 in Careium AB on September 14, 2024 and sell it today you would earn a total of 490.00 from holding Careium AB or generate 19.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dow Jones Industrial vs. Careium AB
Performance |
| Timeline |
Dow Jones and Careium AB Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Careium AB
Pair trading matchups for Careium AB
Pair Trading with Dow Jones and Careium AB
The main advantage of trading using opposite Dow Jones and Careium AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Careium AB 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 Careium AB will offset losses from the drop in Careium AB's long position.| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
| Careium AB vs. Humble Group AB | Careium AB vs. Enad Global 7 | Careium AB vs. Goodbye Kansas Group | Careium AB vs. KABE Group AB |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |