Correlation Between Dow Jones and DigiMax Global
Can any of the company-specific risk be diversified away by investing in both Dow Jones and DigiMax Global 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 DigiMax Global 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 DigiMax Global, you can compare the effects of market volatilities on Dow Jones and DigiMax Global 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 DigiMax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and DigiMax Global.
Diversification Opportunities for Dow Jones and DigiMax Global
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and DigiMax is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and DigiMax Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiMax Global 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 DigiMax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiMax Global has no effect on the direction of Dow Jones i.e., Dow Jones and DigiMax Global go up and down completely randomly.
Pair Corralation between Dow Jones and DigiMax Global
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.09 times more return on investment than DigiMax Global. However, Dow Jones Industrial is 11.03 times less risky than DigiMax Global. It trades about 0.24 of its potential returns per unit of risk. DigiMax Global is currently generating about -0.21 per unit of risk. If you would invest 4,211,440 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 218,211 from holding Dow Jones Industrial or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. DigiMax Global
Performance |
| Timeline |
Dow Jones and DigiMax Global Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
DigiMax Global
Pair trading matchups for DigiMax Global
Pair Trading with Dow Jones and DigiMax Global
The main advantage of trading using opposite Dow Jones and DigiMax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, DigiMax Global 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 DigiMax Global will offset losses from the drop in DigiMax Global's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| DigiMax Global vs. DeFi Technologies | DigiMax Global vs. Argo Blockchain PLC | DigiMax Global vs. Galaxy Digital Holdings | DigiMax Global vs. BIG Blockchain Intelligence |
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 Stocks Directory module to find actively traded stocks across global markets.
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