Correlation Between Dow Jones and Clavister Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Clavister Holding 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 Clavister Holding 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 Clavister Holding AB, you can compare the effects of market volatilities on Dow Jones and Clavister Holding 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 Clavister Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Clavister Holding.
Diversification Opportunities for Dow Jones and Clavister Holding
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Clavister is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Clavister Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clavister Holding 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 Clavister Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clavister Holding has no effect on the direction of Dow Jones i.e., Dow Jones and Clavister Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Clavister Holding
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.32 times less return on investment than Clavister Holding. But when comparing it to its historical volatility, Dow Jones Industrial is 5.44 times less risky than Clavister Holding. It trades about 0.26 of its potential returns per unit of risk. Clavister Holding AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 154.00 in Clavister Holding AB on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Clavister Holding AB or generate 24.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Clavister Holding AB
Performance |
| Timeline |
Dow Jones and Clavister Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Clavister Holding AB
Pair trading matchups for Clavister Holding
Pair Trading with Dow Jones and Clavister Holding
The main advantage of trading using opposite Dow Jones and Clavister Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Clavister Holding 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 Clavister Holding will offset losses from the drop in Clavister Holding's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Clavister Holding vs. BIMobject AB | Clavister Holding vs. Advenica AB | Clavister Holding vs. Crunchfish AB | Clavister Holding vs. Nexam Chemical Holding |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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