Correlation Between Dow Jones and ECC Games
Can any of the company-specific risk be diversified away by investing in both Dow Jones and ECC Games 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 ECC Games 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 ECC Games SA, you can compare the effects of market volatilities on Dow Jones and ECC Games 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 ECC Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and ECC Games.
Diversification Opportunities for Dow Jones and ECC Games
Pay attention - limited upside
The 3 months correlation between Dow and ECC is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and ECC Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECC Games 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 ECC Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECC Games SA has no effect on the direction of Dow Jones i.e., Dow Jones and ECC Games go up and down completely randomly.
Pair Corralation between Dow Jones and ECC Games
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.11 times more return on investment than ECC Games. However, Dow Jones Industrial is 8.73 times less risky than ECC Games. It trades about 0.27 of its potential returns per unit of risk. ECC Games SA is currently generating about -0.17 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Dow Jones Industrial vs. ECC Games SA
Performance |
| Timeline |
Dow Jones and ECC Games Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
ECC Games SA
Pair trading matchups for ECC Games
Pair Trading with Dow Jones and ECC Games
The main advantage of trading using opposite Dow Jones and ECC Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, ECC Games 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 ECC Games will offset losses from the drop in ECC Games' long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| ECC Games vs. Asseco Business Solutions | ECC Games vs. Detalion Games SA | ECC Games vs. Asseco South Eastern | ECC Games vs. Movie Games 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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