Correlation Between Dow Jones and Marine Bancorp
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Marine Bancorp 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 Marine Bancorp 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 Marine Bancorp of, you can compare the effects of market volatilities on Dow Jones and Marine Bancorp 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 Marine Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Marine Bancorp.
Diversification Opportunities for Dow Jones and Marine Bancorp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Marine is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Marine Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Bancorp 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 Marine Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Bancorp has no effect on the direction of Dow Jones i.e., Dow Jones and Marine Bancorp go up and down completely randomly.
Pair Corralation between Dow Jones and Marine Bancorp
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Marine Bancorp. In addition to that, Dow Jones is 10.27 times more volatile than Marine Bancorp of. It trades about -0.01 of its total potential returns per unit of risk. Marine Bancorp of is currently generating about 0.22 per unit of volatility. If you would invest 3,950 in Marine Bancorp of on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Marine Bancorp of or generate 0.25% 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. Marine Bancorp of
Performance |
| Timeline |
Dow Jones and Marine Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Marine Bancorp of
Pair trading matchups for Marine Bancorp
Pair Trading with Dow Jones and Marine Bancorp
The main advantage of trading using opposite Dow Jones and Marine Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Marine Bancorp 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 Marine Bancorp will offset losses from the drop in Marine Bancorp's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Marine Bancorp vs. Mills Music Trust | Marine Bancorp vs. East Africa Metals | Marine Bancorp vs. Chester Mining | Marine Bancorp vs. AKITA Drilling |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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