Correlation Between Dow Jones and NewWave EUR
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By analyzing existing cross correlation between Dow Jones Industrial and NewWave EUR Currency, you can compare the effects of market volatilities on Dow Jones and NewWave EUR 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 NewWave EUR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NewWave EUR.
Diversification Opportunities for Dow Jones and NewWave EUR
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and NewWave is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NewWave EUR Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewWave EUR Currency 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 NewWave EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewWave EUR Currency has no effect on the direction of Dow Jones i.e., Dow Jones and NewWave EUR go up and down completely randomly.
Pair Corralation between Dow Jones and NewWave EUR
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.82 times more return on investment than NewWave EUR. However, Dow Jones is 2.82 times more volatile than NewWave EUR Currency. It trades about 0.34 of its potential returns per unit of risk. NewWave EUR Currency is currently generating about 0.01 per unit of risk. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. NewWave EUR Currency
Performance |
| Timeline |
Dow Jones and NewWave EUR Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NewWave EUR Currency
Pair trading matchups for NewWave EUR
Pair Trading with Dow Jones and NewWave EUR
The main advantage of trading using opposite Dow Jones and NewWave EUR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, NewWave EUR 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 NewWave EUR will offset losses from the drop in NewWave EUR's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| NewWave EUR vs. Europa Metals | NewWave EUR vs. JSE Limited | NewWave EUR vs. British American Tobacco | NewWave EUR vs. Kap Industrial Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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