Correlation Between Dow Jones and Minesto AB
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Minesto AB 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 Minesto AB 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 Minesto AB, you can compare the effects of market volatilities on Dow Jones and Minesto AB 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 Minesto AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Minesto AB.
Diversification Opportunities for Dow Jones and Minesto AB
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Minesto is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Minesto AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minesto AB 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 Minesto AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minesto AB has no effect on the direction of Dow Jones i.e., Dow Jones and Minesto AB go up and down completely randomly.
Pair Corralation between Dow Jones and Minesto AB
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.13 times more return on investment than Minesto AB. However, Dow Jones Industrial is 7.82 times less risky than Minesto AB. It trades about 0.1 of its potential returns per unit of risk. Minesto AB is currently generating about -0.01 per unit of risk. If you would invest 3,528,252 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 901,399 from holding Dow Jones Industrial or generate 25.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Dow Jones Industrial vs. Minesto AB
Performance |
| Timeline |
Dow Jones and Minesto AB Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Minesto AB
Pair trading matchups for Minesto AB
Pair Trading with Dow Jones and Minesto AB
The main advantage of trading using opposite Dow Jones and Minesto AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Minesto AB 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 Minesto AB will offset losses from the drop in Minesto AB's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Minesto AB vs. SolTech Energy Sweden | Minesto AB vs. Eolus Vind AB | Minesto AB vs. Climeon AB | Minesto AB vs. Powercell Sweden |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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