Correlation Between Dow Jones and Lassila Tikanoja
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Lassila Tikanoja 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 Lassila Tikanoja 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 Lassila Tikanoja Oyj, you can compare the effects of market volatilities on Dow Jones and Lassila Tikanoja 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 Lassila Tikanoja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Lassila Tikanoja.
Diversification Opportunities for Dow Jones and Lassila Tikanoja
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Lassila is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Lassila Tikanoja Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassila Tikanoja Oyj 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 Lassila Tikanoja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassila Tikanoja Oyj has no effect on the direction of Dow Jones i.e., Dow Jones and Lassila Tikanoja go up and down completely randomly.
Pair Corralation between Dow Jones and Lassila Tikanoja
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.6 times less return on investment than Lassila Tikanoja. But when comparing it to its historical volatility, Dow Jones Industrial is 1.15 times less risky than Lassila Tikanoja. It trades about 0.33 of its potential returns per unit of risk. Lassila Tikanoja Oyj is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 796.00 in Lassila Tikanoja Oyj on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Lassila Tikanoja Oyj or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Lassila Tikanoja Oyj
Performance |
| Timeline |
Dow Jones and Lassila Tikanoja Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Lassila Tikanoja Oyj
Pair trading matchups for Lassila Tikanoja
Pair Trading with Dow Jones and Lassila Tikanoja
The main advantage of trading using opposite Dow Jones and Lassila Tikanoja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Lassila Tikanoja 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 Lassila Tikanoja will offset losses from the drop in Lassila Tikanoja's long position.| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
| Lassila Tikanoja vs. Tokmanni Group Oyj | Lassila Tikanoja vs. TietoEVRY Corp | Lassila Tikanoja vs. Kemira Oyj | Lassila Tikanoja vs. Konecranes Plc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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