Correlation Between Dow Jones and FuelPositive Corp
Can any of the company-specific risk be diversified away by investing in both Dow Jones and FuelPositive Corp 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 FuelPositive Corp 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 FuelPositive Corp, you can compare the effects of market volatilities on Dow Jones and FuelPositive Corp 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 FuelPositive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and FuelPositive Corp.
Diversification Opportunities for Dow Jones and FuelPositive Corp
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and FuelPositive is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and FuelPositive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelPositive Corp 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 FuelPositive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelPositive Corp has no effect on the direction of Dow Jones i.e., Dow Jones and FuelPositive Corp go up and down completely randomly.
Pair Corralation between Dow Jones and FuelPositive Corp
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.07 times less return on investment than FuelPositive Corp. But when comparing it to its historical volatility, Dow Jones Industrial is 11.89 times less risky than FuelPositive Corp. It trades about 0.17 of its potential returns per unit of risk. FuelPositive Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.00 in FuelPositive Corp on October 24, 2024 and sell it today you would earn a total of 0.00 from holding FuelPositive Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. FuelPositive Corp
Performance |
| Timeline |
Dow Jones and FuelPositive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
FuelPositive Corp
Pair trading matchups for FuelPositive Corp
Pair Trading with Dow Jones and FuelPositive Corp
The main advantage of trading using opposite Dow Jones and FuelPositive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, FuelPositive Corp 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 FuelPositive Corp will offset losses from the drop in FuelPositive Corp's long position.| Dow Jones vs. Transocean | Dow Jones vs. Noble plc | Dow Jones vs. Evolution Gaming Group | Dow Jones vs. Addus HomeCare |
| FuelPositive Corp vs. FuelPositive Corp | FuelPositive Corp vs. Eguana Technologies | FuelPositive Corp vs. Exro Technologies |
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 Stocks Directory module to find actively traded stocks across global markets.
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