Correlation Between Dow Jones and IoTeX Network
Can any of the company-specific risk be diversified away by investing in both Dow Jones and IoTeX Network 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 IoTeX Network 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 IoTeX Network, you can compare the effects of market volatilities on Dow Jones and IoTeX Network 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 IoTeX Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and IoTeX Network.
Diversification Opportunities for Dow Jones and IoTeX Network
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and IoTeX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and IoTeX Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IoTeX Network 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 IoTeX Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IoTeX Network has no effect on the direction of Dow Jones i.e., Dow Jones and IoTeX Network go up and down completely randomly.
Pair Corralation between Dow Jones and IoTeX Network
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.94 times less return on investment than IoTeX Network. But when comparing it to its historical volatility, Dow Jones Industrial is 5.34 times less risky than IoTeX Network. It trades about 0.15 of its potential returns per unit of risk. IoTeX Network is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.18 in IoTeX Network on August 24, 2024 and sell it today you would earn a total of 0.15 from holding IoTeX Network or generate 3.59% 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. IoTeX Network
Performance |
| Timeline |
Dow Jones and IoTeX Network Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
IoTeX Network
Pair trading matchups for IoTeX Network
Pair Trading with Dow Jones and IoTeX Network
The main advantage of trading using opposite Dow Jones and IoTeX Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, IoTeX Network 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 IoTeX Network will offset losses from the drop in IoTeX Network's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| IoTeX Network vs. Staked Ether | IoTeX Network vs. EigenLayer | IoTeX Network vs. EOSDAC | IoTeX Network vs. BLZ |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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