Correlation Between Dow Jones and HAMMONIA Schiffsholding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG, you can compare the effects of market volatilities on Dow Jones and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and HAMMONIA Schiffsholding.
Diversification Opportunities for Dow Jones and HAMMONIA Schiffsholding
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and HAMMONIA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and HAMMONIA Schiffsholding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAMMONIA Schiffsholding has no effect on the direction of Dow Jones i.e., Dow Jones and HAMMONIA Schiffsholding go up and down completely randomly.
Pair Corralation between Dow Jones and HAMMONIA Schiffsholding
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.36 times more return on investment than HAMMONIA Schiffsholding. However, Dow Jones Industrial is 2.77 times less risky than HAMMONIA Schiffsholding. It trades about 0.16 of its potential returns per unit of risk. HAMMONIA Schiffsholding AG is currently generating about 0.01 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.18% |
| Values | Daily Returns |
Dow Jones Industrial vs. HAMMONIA Schiffsholding AG
Performance |
| Timeline |
Dow Jones and HAMMONIA Schiffsholding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
HAMMONIA Schiffsholding AG
Pair trading matchups for HAMMONIA Schiffsholding
Pair Trading with Dow Jones and HAMMONIA Schiffsholding
The main advantage of trading using opposite Dow Jones and HAMMONIA Schiffsholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding will offset losses from the drop in HAMMONIA Schiffsholding's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| HAMMONIA Schiffsholding vs. Qingdao Port International | HAMMONIA Schiffsholding vs. Superior Plus Corp | HAMMONIA Schiffsholding vs. NMI Holdings | HAMMONIA Schiffsholding vs. Origin Agritech |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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