Correlation Between Dow Jones and COMA 18
Can any of the company-specific risk be diversified away by investing in both Dow Jones and COMA 18 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 COMA 18 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 COMA 18 JSC, you can compare the effects of market volatilities on Dow Jones and COMA 18 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 COMA 18. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and COMA 18.
Diversification Opportunities for Dow Jones and COMA 18
Poor diversification
The 3 months correlation between Dow and COMA is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and COMA 18 JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMA 18 JSC 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 COMA 18. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMA 18 JSC has no effect on the direction of Dow Jones i.e., Dow Jones and COMA 18 go up and down completely randomly.
Pair Corralation between Dow Jones and COMA 18
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.11 times less return on investment than COMA 18. But when comparing it to its historical volatility, Dow Jones Industrial is 5.07 times less risky than COMA 18. It trades about 0.29 of its potential returns per unit of risk. COMA 18 JSC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 719,000 in COMA 18 JSC on August 31, 2024 and sell it today you would earn a total of 188,000 from holding COMA 18 JSC or generate 26.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. COMA 18 JSC
Performance |
| Timeline |
Dow Jones and COMA 18 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
COMA 18 JSC
Pair trading matchups for COMA 18
Pair Trading with Dow Jones and COMA 18
The main advantage of trading using opposite Dow Jones and COMA 18 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, COMA 18 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 COMA 18 will offset losses from the drop in COMA 18's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| COMA 18 vs. Truong Thanh Furniture | COMA 18 vs. BaoMinh Insurance Corp | COMA 18 vs. Military Insurance Corp | COMA 18 vs. Sea Air Freight |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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