Correlation Between Dow Jones and K2A Knaust
Can any of the company-specific risk be diversified away by investing in both Dow Jones and K2A Knaust 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 K2A Knaust 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 K2A Knaust Andersson, you can compare the effects of market volatilities on Dow Jones and K2A Knaust 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 K2A Knaust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and K2A Knaust.
Diversification Opportunities for Dow Jones and K2A Knaust
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and K2A is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and K2A Knaust Andersson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2A Knaust Andersson 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 K2A Knaust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2A Knaust Andersson has no effect on the direction of Dow Jones i.e., Dow Jones and K2A Knaust go up and down completely randomly.
Pair Corralation between Dow Jones and K2A Knaust
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.16 times more return on investment than K2A Knaust. However, Dow Jones Industrial is 6.35 times less risky than K2A Knaust. It trades about -0.19 of its potential returns per unit of risk. K2A Knaust Andersson is currently generating about -0.25 per unit of risk. If you would invest 4,471,358 in Dow Jones Industrial on November 28, 2024 and sell it today you would lose (109,242) from holding Dow Jones Industrial or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. K2A Knaust Andersson
Performance |
| Timeline |
Dow Jones and K2A Knaust Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
K2A Knaust Andersson
Pair trading matchups for K2A Knaust
Pair Trading with Dow Jones and K2A Knaust
The main advantage of trading using opposite Dow Jones and K2A Knaust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, K2A Knaust 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 K2A Knaust will offset losses from the drop in K2A Knaust's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| K2A Knaust vs. K Fast Holding AB | K2A Knaust vs. Nyfosa AB | K2A Knaust vs. Fastighets AB Balder | K2A Knaust vs. Catena AB |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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