Correlation Between Dow Jones and Essity AB
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By analyzing existing cross correlation between Dow Jones Industrial and Essity AB, you can compare the effects of market volatilities on Dow Jones and Essity AB 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 Essity AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Essity AB.
Diversification Opportunities for Dow Jones and Essity AB
Very good diversification
The 3 months correlation between Dow and Essity is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Essity AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essity AB 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 Essity AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essity AB has no effect on the direction of Dow Jones i.e., Dow Jones and Essity AB go up and down completely randomly.
Pair Corralation between Dow Jones and Essity AB
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.63 times more return on investment than Essity AB. However, Dow Jones Industrial is 1.59 times less risky than Essity AB. It trades about 0.08 of its potential returns per unit of risk. Essity AB is currently generating about 0.02 per unit of risk. If you would invest 3,424,593 in Dow Jones Industrial on November 2, 2024 and sell it today you would earn a total of 1,029,873 from holding Dow Jones Industrial or generate 30.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. Essity AB
Performance |
| Timeline |
Dow Jones and Essity AB Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Essity AB
Pair trading matchups for Essity AB
Pair Trading with Dow Jones and Essity AB
The main advantage of trading using opposite Dow Jones and Essity AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Essity AB 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 Essity AB will offset losses from the drop in Essity AB's long position.| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
| Essity AB vs. Svenska Cellulosa Aktiebolaget | Essity AB vs. ASSA ABLOY AB | Essity AB vs. AB Electrolux | Essity AB vs. AB SKF |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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