Correlation Between Dow Jones and Inficon Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Inficon Holding 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 Inficon Holding 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 Inficon Holding, you can compare the effects of market volatilities on Dow Jones and Inficon Holding 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 Inficon Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Inficon Holding.
Diversification Opportunities for Dow Jones and Inficon Holding
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Inficon is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Inficon Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inficon Holding 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 Inficon Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inficon Holding has no effect on the direction of Dow Jones i.e., Dow Jones and Inficon Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Inficon Holding
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.39 times more return on investment than Inficon Holding. However, Dow Jones Industrial is 2.55 times less risky than Inficon Holding. It trades about 0.13 of its potential returns per unit of risk. Inficon Holding is currently generating about -0.01 per unit of risk. If you would invest 3,620,444 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 865,587 from holding Dow Jones Industrial or generate 23.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dow Jones Industrial vs. Inficon Holding
Performance |
| Timeline |
Dow Jones and Inficon Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Inficon Holding
Pair trading matchups for Inficon Holding
Pair Trading with Dow Jones and Inficon Holding
The main advantage of trading using opposite Dow Jones and Inficon Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Inficon Holding 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 Inficon Holding will offset losses from the drop in Inficon Holding's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Inficon Holding vs. VAT Group AG | Inficon Holding vs. Comet Holding AG | Inficon Holding vs. Belimo Holding | Inficon Holding vs. Bachem Holding AG |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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