Correlation Between Dow Jones and Grupa KTY
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Grupa KTY 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 Grupa KTY 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 Grupa KTY SA, you can compare the effects of market volatilities on Dow Jones and Grupa KTY 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 Grupa KTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Grupa KTY.
Diversification Opportunities for Dow Jones and Grupa KTY
Very good diversification
The 3 months correlation between Dow and Grupa is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Grupa KTY SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa KTY SA 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 Grupa KTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa KTY SA has no effect on the direction of Dow Jones i.e., Dow Jones and Grupa KTY go up and down completely randomly.
Pair Corralation between Dow Jones and Grupa KTY
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.39 times more return on investment than Grupa KTY. However, Dow Jones Industrial is 2.58 times less risky than Grupa KTY. It trades about 0.16 of its potential returns per unit of risk. Grupa KTY SA is currently generating about -0.04 per unit of risk. If you would invest 3,879,899 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 621,505 from holding Dow Jones Industrial or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dow Jones Industrial vs. Grupa KTY SA
Performance |
| Timeline |
Dow Jones and Grupa KTY Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Grupa KTY SA
Pair trading matchups for Grupa KTY
Pair Trading with Dow Jones and Grupa KTY
The main advantage of trading using opposite Dow Jones and Grupa KTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Grupa KTY 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 Grupa KTY will offset losses from the drop in Grupa KTY's long position.| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
| Grupa KTY vs. Asseco Business Solutions | Grupa KTY vs. Detalion Games SA | Grupa KTY vs. Kogeneracja SA | Grupa KTY vs. Asseco South Eastern |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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