Correlation Between Dow Jones and Kion Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Kion Group 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 Kion Group 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 Kion Group AG, you can compare the effects of market volatilities on Dow Jones and Kion Group 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 Kion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Kion Group.
Diversification Opportunities for Dow Jones and Kion Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Kion is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Kion Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kion Group AG 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 Kion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kion Group AG has no effect on the direction of Dow Jones i.e., Dow Jones and Kion Group go up and down completely randomly.
Pair Corralation between Dow Jones and Kion Group
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.08 times less return on investment than Kion Group. But when comparing it to its historical volatility, Dow Jones Industrial is 3.38 times less risky than Kion Group. It trades about 0.16 of its potential returns per unit of risk. Kion Group AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 868.00 in Kion Group AG on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Kion Group AG or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Kion Group AG
Performance |
| Timeline |
Dow Jones and Kion Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Kion Group AG
Pair trading matchups for Kion Group
Pair Trading with Dow Jones and Kion Group
The main advantage of trading using opposite Dow Jones and Kion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Kion Group 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 Kion Group will offset losses from the drop in Kion Group's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Kion Group vs. Rev Group | Kion Group vs. Gencor Industries | Kion Group vs. Alamo Group | Kion Group vs. Wabash National |
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 Stocks Directory module to find actively traded stocks across global markets.
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