Correlation Between Dow Jones and Nanexa AB
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Nanexa 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 Nanexa 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 Nanexa AB, you can compare the effects of market volatilities on Dow Jones and Nanexa 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 Nanexa AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nanexa AB.
Diversification Opportunities for Dow Jones and Nanexa AB
Excellent diversification
The 3 months correlation between Dow and Nanexa is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nanexa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanexa 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 Nanexa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanexa AB has no effect on the direction of Dow Jones i.e., Dow Jones and Nanexa AB go up and down completely randomly.
Pair Corralation between Dow Jones and Nanexa AB
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.85 times less return on investment than Nanexa AB. But when comparing it to its historical volatility, Dow Jones Industrial is 8.02 times less risky than Nanexa AB. It trades about 0.37 of its potential returns per unit of risk. Nanexa AB is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Nanexa AB on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Nanexa AB or generate 28.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nanexa AB
Performance |
| Timeline |
Dow Jones and Nanexa AB Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nanexa AB
Pair trading matchups for Nanexa AB
Pair Trading with Dow Jones and Nanexa AB
The main advantage of trading using opposite Dow Jones and Nanexa AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Nanexa 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 Nanexa AB will offset losses from the drop in Nanexa AB's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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