Correlation Between Dow Jones and Killam Apartment
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Killam Apartment 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 Killam Apartment 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 Killam Apartment Real, you can compare the effects of market volatilities on Dow Jones and Killam Apartment 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 Killam Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Killam Apartment.
Diversification Opportunities for Dow Jones and Killam Apartment
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Killam is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Killam Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killam Apartment Real 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 Killam Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killam Apartment Real has no effect on the direction of Dow Jones i.e., Dow Jones and Killam Apartment go up and down completely randomly.
Pair Corralation between Dow Jones and Killam Apartment
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.55 times more return on investment than Killam Apartment. However, Dow Jones Industrial is 1.82 times less risky than Killam Apartment. It trades about 0.12 of its potential returns per unit of risk. Killam Apartment Real is currently generating about 0.03 per unit of risk. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Dow Jones Industrial vs. Killam Apartment Real
Performance |
| Timeline |
Dow Jones and Killam Apartment Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Killam Apartment Real
Pair trading matchups for Killam Apartment
Pair Trading with Dow Jones and Killam Apartment
The main advantage of trading using opposite Dow Jones and Killam Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Killam Apartment 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 Killam Apartment will offset losses from the drop in Killam Apartment's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| Killam Apartment vs. InterRent Real Estate | Killam Apartment vs. Canadian Apartment Properties | Killam Apartment vs. Granite Real Estate | Killam Apartment vs. Crombie Real Estate |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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