Correlation Between Dow Jones and Catalyst Exceed
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Catalyst Exceed 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 Catalyst Exceed 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 Catalyst Exceed Defined, you can compare the effects of market volatilities on Dow Jones and Catalyst Exceed 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 Catalyst Exceed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Catalyst Exceed.
Diversification Opportunities for Dow Jones and Catalyst Exceed
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Catalyst is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Catalyst Exceed Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Exceed Defined 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 Catalyst Exceed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Exceed Defined has no effect on the direction of Dow Jones i.e., Dow Jones and Catalyst Exceed go up and down completely randomly.
Pair Corralation between Dow Jones and Catalyst Exceed
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.3 times less return on investment than Catalyst Exceed. But when comparing it to its historical volatility, Dow Jones Industrial is 1.18 times less risky than Catalyst Exceed. It trades about 0.08 of its potential returns per unit of risk. Catalyst Exceed Defined is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 911.00 in Catalyst Exceed Defined on September 3, 2024 and sell it today you would earn a total of 389.00 from holding Catalyst Exceed Defined or generate 42.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Catalyst Exceed Defined
Performance |
| Timeline |
Dow Jones and Catalyst Exceed Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Catalyst Exceed Defined
Pair trading matchups for Catalyst Exceed
Pair Trading with Dow Jones and Catalyst Exceed
The main advantage of trading using opposite Dow Jones and Catalyst Exceed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Catalyst Exceed 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 Catalyst Exceed will offset losses from the drop in Catalyst Exceed's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Catalyst Exceed vs. Jpmorgan Equity Income | Catalyst Exceed vs. Jpmorgan Hedged Equity | Catalyst Exceed vs. Calamos Market Neutral | Catalyst Exceed vs. Jpmorgan Emerging Markets |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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