Correlation Between Dow Jones and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Dow Jones and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on Dow Jones and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and HomeToGo.
Diversification Opportunities for Dow Jones and HomeToGo
Very weak diversification
The 3 months correlation between Dow and HomeToGo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Dow Jones i.e., Dow Jones and HomeToGo go up and down completely randomly.
Pair Corralation between Dow Jones and HomeToGo
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.34 times more return on investment than HomeToGo. However, Dow Jones Industrial is 2.95 times less risky than HomeToGo. It trades about 0.27 of its potential returns per unit of risk. HomeToGo SE is currently generating about -0.13 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. HomeToGo SE
Performance |
| Timeline |
Dow Jones and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
HomeToGo SE
Pair trading matchups for HomeToGo
Pair Trading with Dow Jones and HomeToGo
The main advantage of trading using opposite Dow Jones and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Correlations Find global opportunities by holding instruments from different markets |