Correlation Between Dow Jones and Ten Sixty
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Ten Sixty 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 Ten Sixty 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 Ten Sixty Four, you can compare the effects of market volatilities on Dow Jones and Ten Sixty 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 Ten Sixty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Ten Sixty.
Diversification Opportunities for Dow Jones and Ten Sixty
Modest diversification
The 3 months correlation between Dow and Ten is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Ten Sixty Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ten Sixty Four 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 Ten Sixty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ten Sixty Four has no effect on the direction of Dow Jones i.e., Dow Jones and Ten Sixty go up and down completely randomly.
Pair Corralation between Dow Jones and Ten Sixty
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.04 times more return on investment than Ten Sixty. However, Dow Jones Industrial is 24.24 times less risky than Ten Sixty. It trades about 0.1 of its potential returns per unit of risk. Ten Sixty Four is currently generating about -0.23 per unit of risk. If you would invest 4,290,695 in Dow Jones Industrial on October 23, 2024 and sell it today you would earn a total of 58,088 from holding Dow Jones Industrial or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Ten Sixty Four
Performance |
| Timeline |
Dow Jones and Ten Sixty Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Ten Sixty Four
Pair trading matchups for Ten Sixty
Pair Trading with Dow Jones and Ten Sixty
The main advantage of trading using opposite Dow Jones and Ten Sixty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Ten Sixty 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 Ten Sixty will offset losses from the drop in Ten Sixty's long position.| Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. NiSource | Dow Jones vs. Kinetik Holdings | Dow Jones vs. Empresa Distribuidora y |
| Ten Sixty vs. Perseus Mining Limited | Ten Sixty vs. Hummingbird Resources PLC | Ten Sixty vs. Resolute Mining Limited | Ten Sixty vs. Regis Resources |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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