Correlation Between Dow Jones and Mulberry Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mulberry 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 Mulberry 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 Mulberry Group PLC, you can compare the effects of market volatilities on Dow Jones and Mulberry 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 Mulberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mulberry Group.
Diversification Opportunities for Dow Jones and Mulberry Group
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Mulberry is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mulberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulberry Group PLC 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 Mulberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulberry Group PLC has no effect on the direction of Dow Jones i.e., Dow Jones and Mulberry Group go up and down completely randomly.
Pair Corralation between Dow Jones and Mulberry Group
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.19 times more return on investment than Mulberry Group. However, Dow Jones Industrial is 5.31 times less risky than Mulberry Group. It trades about 0.16 of its potential returns per unit of risk. Mulberry Group PLC is currently generating about -0.01 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mulberry Group PLC
Performance |
| Timeline |
Dow Jones and Mulberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mulberry Group PLC
Pair trading matchups for Mulberry Group
Pair Trading with Dow Jones and Mulberry Group
The main advantage of trading using opposite Dow Jones and Mulberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mulberry 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 Mulberry Group will offset losses from the drop in Mulberry Group's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Mulberry Group vs. Auto Trader Group | Mulberry Group vs. Diversified Energy | Mulberry Group vs. Air Products Chemicals | Mulberry Group vs. Lowland Investment Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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