Correlation Between Dow Jones and Capitania Agro
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Capitania Agro 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 Capitania Agro 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 Capitania Agro Strategies, you can compare the effects of market volatilities on Dow Jones and Capitania Agro 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 Capitania Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Capitania Agro.
Diversification Opportunities for Dow Jones and Capitania Agro
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Capitania is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Capitania Agro Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitania Agro Strategies 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 Capitania Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitania Agro Strategies has no effect on the direction of Dow Jones i.e., Dow Jones and Capitania Agro go up and down completely randomly.
Pair Corralation between Dow Jones and Capitania Agro
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Capitania Agro. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.5 times less risky than Capitania Agro. The index trades about -0.16 of its potential returns per unit of risk. The Capitania Agro Strategies is currently generating about 0.59 of returns per unit of risk over similar time horizon. If you would invest 608.00 in Capitania Agro Strategies on December 1, 2024 and sell it today you would earn a total of 87.00 from holding Capitania Agro Strategies or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Capitania Agro Strategies
Performance |
| Timeline |
Dow Jones and Capitania Agro Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Capitania Agro Strategies
Pair trading matchups for Capitania Agro
Pair Trading with Dow Jones and Capitania Agro
The main advantage of trading using opposite Dow Jones and Capitania Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Capitania Agro 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 Capitania Agro will offset losses from the drop in Capitania Agro's long position.| Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
| Capitania Agro vs. Capitania Infra Fic | Capitania Agro vs. Capitania Securities II | Capitania Agro vs. RB Capital Office | Capitania Agro vs. Ishares Msci Brazil |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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