Correlation Between Dow Jones and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Bilfinger 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 Bilfinger 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 Bilfinger SE, you can compare the effects of market volatilities on Dow Jones and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bilfinger.
Diversification Opportunities for Dow Jones and Bilfinger
Very good diversification
The 3 months correlation between Dow and Bilfinger is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of Dow Jones i.e., Dow Jones and Bilfinger go up and down completely randomly.
Pair Corralation between Dow Jones and Bilfinger
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Bilfinger. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 3.25 times less risky than Bilfinger. The index trades about -0.01 of its potential returns per unit of risk. The Bilfinger SE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,635 in Bilfinger SE on September 12, 2024 and sell it today you would earn a total of 130.00 from holding Bilfinger SE or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. Bilfinger SE
Performance |
| Timeline |
Dow Jones and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bilfinger SE
Pair trading matchups for Bilfinger
Pair Trading with Dow Jones and Bilfinger
The main advantage of trading using opposite Dow Jones and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Bilfinger vs. BOSTON BEER A | Bilfinger vs. United Breweries Co | Bilfinger vs. MagnaChip Semiconductor Corp | Bilfinger vs. Westinghouse Air Brake |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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