Correlation Between Dow Jones and JX Luxventure
Can any of the company-specific risk be diversified away by investing in both Dow Jones and JX Luxventure 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 JX Luxventure 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 JX Luxventure Limited, you can compare the effects of market volatilities on Dow Jones and JX Luxventure 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 JX Luxventure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and JX Luxventure.
Diversification Opportunities for Dow Jones and JX Luxventure
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and JXJT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and JX Luxventure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JX Luxventure Limited 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 JX Luxventure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JX Luxventure Limited has no effect on the direction of Dow Jones i.e., Dow Jones and JX Luxventure go up and down completely randomly.
Pair Corralation between Dow Jones and JX Luxventure
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.14 times more return on investment than JX Luxventure. However, Dow Jones Industrial is 7.27 times less risky than JX Luxventure. It trades about 0.26 of its potential returns per unit of risk. JX Luxventure Limited is currently generating about -0.08 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. JX Luxventure Limited
Performance |
| Timeline |
Dow Jones and JX Luxventure Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
JX Luxventure Limited
Pair trading matchups for JX Luxventure
Pair Trading with Dow Jones and JX Luxventure
The main advantage of trading using opposite Dow Jones and JX Luxventure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, JX Luxventure 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 JX Luxventure will offset losses from the drop in JX Luxventure's long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| JX Luxventure vs. VF Corporation | JX Luxventure vs. Levi Strauss Co | JX Luxventure vs. Under Armour A | JX Luxventure vs. Oxford Industries |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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