Correlation Between Dow Jones and M Cash
Can any of the company-specific risk be diversified away by investing in both Dow Jones and M Cash 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 M Cash 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 M Cash Integrasi, you can compare the effects of market volatilities on Dow Jones and M Cash 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 M Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and M Cash.
Diversification Opportunities for Dow Jones and M Cash
Good diversification
The 3 months correlation between Dow and MCAS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and M Cash Integrasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Cash Integrasi 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 M Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Cash Integrasi has no effect on the direction of Dow Jones i.e., Dow Jones and M Cash go up and down completely randomly.
Pair Corralation between Dow Jones and M Cash
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.37 times less return on investment than M Cash. But when comparing it to its historical volatility, Dow Jones Industrial is 5.33 times less risky than M Cash. It trades about 0.16 of its potential returns per unit of risk. M Cash Integrasi is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 87,000 in M Cash Integrasi on September 2, 2024 and sell it today you would earn a total of 25,500 from holding M Cash Integrasi or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. M Cash Integrasi
Performance |
| Timeline |
Dow Jones and M Cash Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
M Cash Integrasi
Pair trading matchups for M Cash
Pair Trading with Dow Jones and M Cash
The main advantage of trading using opposite Dow Jones and M Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, M Cash 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 M Cash will offset losses from the drop in M Cash's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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