Correlation Between Dow Jones and GIMV NV
Can any of the company-specific risk be diversified away by investing in both Dow Jones and GIMV NV 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 GIMV NV 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 GIMV NV, you can compare the effects of market volatilities on Dow Jones and GIMV NV 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 GIMV NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and GIMV NV.
Diversification Opportunities for Dow Jones and GIMV NV
Very good diversification
The 3 months correlation between Dow and GIMV is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and GIMV NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIMV NV 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 GIMV NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIMV NV has no effect on the direction of Dow Jones i.e., Dow Jones and GIMV NV go up and down completely randomly.
Pair Corralation between Dow Jones and GIMV NV
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.53 times more return on investment than GIMV NV. However, Dow Jones Industrial is 1.88 times less risky than GIMV NV. It trades about 0.29 of its potential returns per unit of risk. GIMV NV is currently generating about 0.12 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. GIMV NV
Performance |
| Timeline |
Dow Jones and GIMV NV Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
GIMV NV
Pair trading matchups for GIMV NV
Pair Trading with Dow Jones and GIMV NV
The main advantage of trading using opposite Dow Jones and GIMV NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, GIMV NV 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 GIMV NV will offset losses from the drop in GIMV NV's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| GIMV NV vs. Groep Brussel Lambert | GIMV NV vs. Ackermans Van Haaren | GIMV NV vs. Sofina Socit Anonyme | GIMV NV vs. Brederode SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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