Correlation Between Dow Jones and Klondike Gold
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Klondike Gold 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 Klondike Gold 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 Klondike Gold Corp, you can compare the effects of market volatilities on Dow Jones and Klondike Gold 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 Klondike Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Klondike Gold.
Diversification Opportunities for Dow Jones and Klondike Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Klondike is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp 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 Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Dow Jones i.e., Dow Jones and Klondike Gold go up and down completely randomly.
Pair Corralation between Dow Jones and Klondike Gold
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.14 times more return on investment than Klondike Gold. However, Dow Jones Industrial is 7.39 times less risky than Klondike Gold. It trades about 0.33 of its potential returns per unit of risk. Klondike Gold Corp is currently generating about -0.08 per unit of risk. If you would invest 4,263,520 in Dow Jones Industrial on November 9, 2024 and sell it today you would earn a total of 211,243 from holding Dow Jones Industrial or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. Klondike Gold Corp
Performance |
| Timeline |
Dow Jones and Klondike Gold Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Klondike Gold Corp
Pair trading matchups for Klondike Gold
Pair Trading with Dow Jones and Klondike Gold
The main advantage of trading using opposite Dow Jones and Klondike Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Klondike Gold 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 Klondike Gold will offset losses from the drop in Klondike Gold's long position.| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
| Klondike Gold vs. Golden Goliath Resources | Klondike Gold vs. Minera Alamos | Klondike Gold vs. Klondike Silver Corp | Klondike Gold vs. Metallic Minerals Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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