Correlation Between Dow Jones and FlexQube
Can any of the company-specific risk be diversified away by investing in both Dow Jones and FlexQube 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 FlexQube 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 FlexQube AB, you can compare the effects of market volatilities on Dow Jones and FlexQube 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 FlexQube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and FlexQube.
Diversification Opportunities for Dow Jones and FlexQube
Very good diversification
The 3 months correlation between Dow and FlexQube is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and FlexQube AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexQube 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 FlexQube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexQube AB has no effect on the direction of Dow Jones i.e., Dow Jones and FlexQube go up and down completely randomly.
Pair Corralation between Dow Jones and FlexQube
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.2 times more return on investment than FlexQube. However, Dow Jones Industrial is 5.06 times less risky than FlexQube. It trades about 0.1 of its potential returns per unit of risk. FlexQube AB is currently generating about 0.0 per unit of risk. If you would invest 3,888,426 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 566,040 from holding Dow Jones Industrial or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Dow Jones Industrial vs. FlexQube AB
Performance |
| Timeline |
Dow Jones and FlexQube Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
FlexQube AB
Pair trading matchups for FlexQube
Pair Trading with Dow Jones and FlexQube
The main advantage of trading using opposite Dow Jones and FlexQube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, FlexQube 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 FlexQube will offset losses from the drop in FlexQube's long position.| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
| FlexQube vs. Generic Sweden publ | FlexQube vs. Firefly AB | FlexQube vs. Awardit AB | FlexQube vs. BIMobject AB |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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