Correlation Between Dow Jones and Cresud SA
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Cresud SA 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 Cresud SA 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 Cresud SA, you can compare the effects of market volatilities on Dow Jones and Cresud SA 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 Cresud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Cresud SA.
Diversification Opportunities for Dow Jones and Cresud SA
Average diversification
The 3 months correlation between Dow and Cresud is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud SA 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 Cresud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SA has no effect on the direction of Dow Jones i.e., Dow Jones and Cresud SA go up and down completely randomly.
Pair Corralation between Dow Jones and Cresud SA
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.29 times more return on investment than Cresud SA. However, Dow Jones Industrial is 3.49 times less risky than Cresud SA. It trades about 0.17 of its potential returns per unit of risk. Cresud SA is currently generating about -0.01 per unit of risk. If you would invest 4,234,224 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 114,559 from holding Dow Jones Industrial or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dow Jones Industrial vs. Cresud SA
Performance |
| Timeline |
Dow Jones and Cresud SA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Cresud SA
Pair trading matchups for Cresud SA
Pair Trading with Dow Jones and Cresud SA
The main advantage of trading using opposite Dow Jones and Cresud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Cresud SA 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 Cresud SA will offset losses from the drop in Cresud SA's long position.| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
| Cresud SA vs. Molinos Agro SA | Cresud SA vs. San Miguel AG | Cresud SA vs. Ledesma SAAI | Cresud SA vs. Inversora Juramento 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 CEOs Directory module to screen CEOs from public companies around the world.
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