Correlation Between Dow Jones and Institut IGH
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Institut IGH 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 Institut IGH 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 Institut IGH dd, you can compare the effects of market volatilities on Dow Jones and Institut IGH 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 Institut IGH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Institut IGH.
Diversification Opportunities for Dow Jones and Institut IGH
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Institut is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Institut IGH dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Institut IGH dd 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 Institut IGH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Institut IGH dd has no effect on the direction of Dow Jones i.e., Dow Jones and Institut IGH go up and down completely randomly.
Pair Corralation between Dow Jones and Institut IGH
Assuming the 90 days trading horizon Dow Jones is expected to generate 5.02 times less return on investment than Institut IGH. But when comparing it to its historical volatility, Dow Jones Industrial is 7.7 times less risky than Institut IGH. It trades about 0.08 of its potential returns per unit of risk. Institut IGH dd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,114 in Institut IGH dd on September 14, 2024 and sell it today you would earn a total of 586.00 from holding Institut IGH dd or generate 52.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.69% |
| Values | Daily Returns |
Dow Jones Industrial vs. Institut IGH dd
Performance |
| Timeline |
Dow Jones and Institut IGH Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Institut IGH dd
Pair trading matchups for Institut IGH
Pair Trading with Dow Jones and Institut IGH
The main advantage of trading using opposite Dow Jones and Institut IGH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Institut IGH 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 Institut IGH will offset losses from the drop in Institut IGH's long position.| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
| Institut IGH vs. AD Plastik dd | Institut IGH vs. Hrvatska Postanska Banka | Institut IGH vs. Dalekovod dd | Institut IGH vs. Podravka Prehrambena Industrija |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |