Correlation Between Dow Jones and Claranova
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Claranova 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 Claranova 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 Claranova SE, you can compare the effects of market volatilities on Dow Jones and Claranova 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 Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Claranova.
Diversification Opportunities for Dow Jones and Claranova
Very good diversification
The 3 months correlation between Dow and Claranova is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE 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 Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Dow Jones i.e., Dow Jones and Claranova go up and down completely randomly.
Pair Corralation between Dow Jones and Claranova
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.42 times more return on investment than Claranova. However, Dow Jones Industrial is 2.37 times less risky than Claranova. It trades about 0.15 of its potential returns per unit of risk. Claranova SE is currently generating about -0.06 per unit of risk. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Claranova SE
Performance |
| Timeline |
Dow Jones and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Claranova SE
Pair trading matchups for Claranova
Pair Trading with Dow Jones and Claranova
The main advantage of trading using opposite Dow Jones and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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