Correlation Between Dow Jones and Mace Security
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mace Security 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 Mace Security 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 Mace Security Intl, you can compare the effects of market volatilities on Dow Jones and Mace Security 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 Mace Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mace Security.
Diversification Opportunities for Dow Jones and Mace Security
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Mace is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mace Security Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mace Security Intl 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 Mace Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mace Security Intl has no effect on the direction of Dow Jones i.e., Dow Jones and Mace Security go up and down completely randomly.
Pair Corralation between Dow Jones and Mace Security
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 190,894 from holding Dow Jones Industrial or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mace Security Intl
Performance |
| Timeline |
Dow Jones and Mace Security Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mace Security Intl
Pair trading matchups for Mace Security
Pair Trading with Dow Jones and Mace Security
The main advantage of trading using opposite Dow Jones and Mace Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mace Security 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 Mace Security will offset losses from the drop in Mace Security'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 |
| Mace Security vs. CompX International | Mace Security vs. Mistras Group | Mace Security vs. MSA Safety | Mace Security vs. Brinks Company |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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