Correlation Between Dow Jones and GGX Gold
Can any of the company-specific risk be diversified away by investing in both Dow Jones and GGX Gold 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 GGX Gold 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 GGX Gold Corp, you can compare the effects of market volatilities on Dow Jones and GGX Gold 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 GGX Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and GGX Gold.
Diversification Opportunities for Dow Jones and GGX Gold
Very good diversification
The 3 months correlation between Dow and GGX is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and GGX Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GGX Gold Corp 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 GGX Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GGX Gold Corp has no effect on the direction of Dow Jones i.e., Dow Jones and GGX Gold go up and down completely randomly.
Pair Corralation between Dow Jones and GGX Gold
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.1 times more return on investment than GGX Gold. However, Dow Jones Industrial is 10.32 times less risky than GGX Gold. It trades about 0.26 of its potential returns per unit of risk. GGX Gold Corp is currently generating about -0.12 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. GGX Gold Corp
Performance |
| Timeline |
Dow Jones and GGX Gold Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
GGX Gold Corp
Pair trading matchups for GGX Gold
Pair Trading with Dow Jones and GGX Gold
The main advantage of trading using opposite Dow Jones and GGX Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, GGX Gold 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 GGX Gold will offset losses from the drop in GGX Gold's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| GGX Gold vs. GFG Resources | GGX Gold vs. Klondike Gold Corp | GGX Gold vs. Jaguar Mining | GGX Gold vs. Marvel Gold Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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