Correlation Between Dow Jones and Danimer Scientific
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Danimer Scientific 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 Danimer Scientific 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 Danimer Scientific, you can compare the effects of market volatilities on Dow Jones and Danimer Scientific 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 Danimer Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Danimer Scientific.
Diversification Opportunities for Dow Jones and Danimer Scientific
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Danimer is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Danimer Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danimer Scientific 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 Danimer Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danimer Scientific has no effect on the direction of Dow Jones i.e., Dow Jones and Danimer Scientific go up and down completely randomly.
Pair Corralation between Dow Jones and Danimer Scientific
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.07 times more return on investment than Danimer Scientific. However, Dow Jones Industrial is 15.23 times less risky than Danimer Scientific. It trades about 0.09 of its potential returns per unit of risk. Danimer Scientific is currently generating about -0.21 per unit of risk. If you would invest 4,219,652 in Dow Jones Industrial on November 1, 2024 and sell it today you would earn a total of 251,700 from holding Dow Jones Industrial or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.49% |
| Values | Daily Returns |
Dow Jones Industrial vs. Danimer Scientific
Performance |
| Timeline |
Dow Jones and Danimer Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Danimer Scientific
Pair trading matchups for Danimer Scientific
Pair Trading with Dow Jones and Danimer Scientific
The main advantage of trading using opposite Dow Jones and Danimer Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Danimer Scientific 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 Danimer Scientific will offset losses from the drop in Danimer Scientific's long position.| Dow Jones vs. WEC Energy Group | Dow Jones vs. Pure Cycle | Dow Jones vs. Tandy Leather Factory | Dow Jones vs. Tapestry |
| Danimer Scientific vs. LyondellBasell Industries NV | Danimer Scientific vs. International Flavors Fragrances | Danimer Scientific vs. Cabot | Danimer Scientific vs. Westlake Chemical |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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