Correlation Between Dow Jones and EXCELSIOR UNITED
Can any of the company-specific risk be diversified away by investing in both Dow Jones and EXCELSIOR UNITED 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 EXCELSIOR UNITED 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 EXCELSIOR UNITED DEVELOPMENT, you can compare the effects of market volatilities on Dow Jones and EXCELSIOR UNITED 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 EXCELSIOR UNITED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and EXCELSIOR UNITED.
Diversification Opportunities for Dow Jones and EXCELSIOR UNITED
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and EXCELSIOR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and EXCELSIOR UNITED DEVELOPMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXCELSIOR UNITED DEV 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 EXCELSIOR UNITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXCELSIOR UNITED DEV has no effect on the direction of Dow Jones i.e., Dow Jones and EXCELSIOR UNITED go up and down completely randomly.
Pair Corralation between Dow Jones and EXCELSIOR UNITED
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.03 times more return on investment than EXCELSIOR UNITED. However, Dow Jones is 1.03 times more volatile than EXCELSIOR UNITED DEVELOPMENT. It trades about 0.3 of its potential returns per unit of risk. EXCELSIOR UNITED DEVELOPMENT is currently generating about -0.3 per unit of risk. If you would invest 4,270,656 in Dow Jones Industrial on November 5, 2024 and sell it today you would earn a total of 183,810 from holding Dow Jones Industrial or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. EXCELSIOR UNITED DEVELOPMENT
Performance |
| Timeline |
Dow Jones and EXCELSIOR UNITED Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
EXCELSIOR UNITED DEVELOPMENT
Pair trading matchups for EXCELSIOR UNITED
Pair Trading with Dow Jones and EXCELSIOR UNITED
The main advantage of trading using opposite Dow Jones and EXCELSIOR UNITED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, EXCELSIOR UNITED 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 EXCELSIOR UNITED will offset losses from the drop in EXCELSIOR UNITED's long position.| Dow Jones vs. Fernhill Beverage | Dow Jones vs. Fomento Economico Mexicano | Dow Jones vs. Loud Beverage Group | Dow Jones vs. Diageo PLC ADR |
| EXCELSIOR UNITED vs. FINCORP INVESTMENT LTD | EXCELSIOR UNITED vs. MCB GROUP LIMITED | EXCELSIOR UNITED vs. MCB GROUP LTD | EXCELSIOR UNITED vs. LOTTOTECH LTD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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