Correlation Between Dow Jones and Cassiar Gold
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Cassiar 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 Cassiar 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 Cassiar Gold Corp, you can compare the effects of market volatilities on Dow Jones and Cassiar 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 Cassiar Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Cassiar Gold.
Diversification Opportunities for Dow Jones and Cassiar Gold
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Cassiar is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Cassiar Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cassiar 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 Cassiar Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cassiar Gold Corp has no effect on the direction of Dow Jones i.e., Dow Jones and Cassiar Gold go up and down completely randomly.
Pair Corralation between Dow Jones and Cassiar Gold
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.32 times less return on investment than Cassiar Gold. But when comparing it to its historical volatility, Dow Jones Industrial is 4.71 times less risky than Cassiar Gold. It trades about 0.29 of its potential returns per unit of risk. Cassiar Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Cassiar Gold Corp on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Cassiar Gold Corp or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. Cassiar Gold Corp
Performance |
| Timeline |
Dow Jones and Cassiar Gold Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Cassiar Gold Corp
Pair trading matchups for Cassiar Gold
Pair Trading with Dow Jones and Cassiar Gold
The main advantage of trading using opposite Dow Jones and Cassiar Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Cassiar 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 Cassiar Gold will offset losses from the drop in Cassiar Gold's long position.| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
| Cassiar Gold vs. Constellation Software | Cassiar Gold vs. Computer Modelling Group | Cassiar Gold vs. Calian Technologies | Cassiar Gold vs. Northstar Clean Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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