Correlation Between Dow Jones and Moment Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Moment Group 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 Moment Group 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 Moment Group AB, you can compare the effects of market volatilities on Dow Jones and Moment Group 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 Moment Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Moment Group.
Diversification Opportunities for Dow Jones and Moment Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Moment is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Moment Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moment Group 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 Moment Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moment Group AB has no effect on the direction of Dow Jones i.e., Dow Jones and Moment Group go up and down completely randomly.
Pair Corralation between Dow Jones and Moment Group
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.17 times more return on investment than Moment Group. However, Dow Jones Industrial is 5.75 times less risky than Moment Group. It trades about 0.15 of its potential returns per unit of risk. Moment Group AB is currently generating about 0.0 per unit of risk. If you would invest 3,870,327 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 584,139 from holding Dow Jones Industrial or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Dow Jones Industrial vs. Moment Group AB
Performance |
| Timeline |
Dow Jones and Moment Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Moment Group AB
Pair trading matchups for Moment Group
Pair Trading with Dow Jones and Moment Group
The main advantage of trading using opposite Dow Jones and Moment Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Moment Group 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 Moment Group will offset losses from the drop in Moment Group's long position.| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
| Moment Group vs. Karolinska Development AB | Moment Group vs. Oncopeptides AB | Moment Group vs. Episurf Medical AB |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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