Correlation Between Dow Jones and Kunlun Energy
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Kunlun Energy 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 Kunlun Energy 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 Kunlun Energy, you can compare the effects of market volatilities on Dow Jones and Kunlun Energy 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 Kunlun Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Kunlun Energy.
Diversification Opportunities for Dow Jones and Kunlun Energy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Kunlun is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Kunlun Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunlun Energy 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 Kunlun Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunlun Energy has no effect on the direction of Dow Jones i.e., Dow Jones and Kunlun Energy go up and down completely randomly.
Pair Corralation between Dow Jones and Kunlun Energy
If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Kunlun Energy
Performance |
| Timeline |
Dow Jones and Kunlun Energy Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Kunlun Energy
Pair trading matchups for Kunlun Energy
Pair Trading with Dow Jones and Kunlun Energy
The main advantage of trading using opposite Dow Jones and Kunlun Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Kunlun Energy 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 Kunlun Energy will offset losses from the drop in Kunlun Energy's long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| Kunlun Energy vs. Bill Com Holdings | Kunlun Energy vs. Chemours Co | Kunlun Energy vs. Rumble Inc | Kunlun Energy vs. Parker Hannifin |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |