Correlation Between Dow Jones and NORTHERN NIGERIA
Can any of the company-specific risk be diversified away by investing in both Dow Jones and NORTHERN NIGERIA 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 NORTHERN NIGERIA 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 NORTHERN NIGERIA FLOUR, you can compare the effects of market volatilities on Dow Jones and NORTHERN NIGERIA 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 NORTHERN NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NORTHERN NIGERIA.
Diversification Opportunities for Dow Jones and NORTHERN NIGERIA
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and NORTHERN is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NORTHERN NIGERIA FLOUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN NIGERIA FLOUR 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 NORTHERN NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN NIGERIA FLOUR has no effect on the direction of Dow Jones i.e., Dow Jones and NORTHERN NIGERIA go up and down completely randomly.
Pair Corralation between Dow Jones and NORTHERN NIGERIA
Assuming the 90 days trading horizon Dow Jones is expected to generate 19.45 times less return on investment than NORTHERN NIGERIA. But when comparing it to its historical volatility, Dow Jones Industrial is 3.98 times less risky than NORTHERN NIGERIA. It trades about 0.02 of its potential returns per unit of risk. NORTHERN NIGERIA FLOUR is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,525 in NORTHERN NIGERIA FLOUR on September 20, 2024 and sell it today you would earn a total of 480.00 from holding NORTHERN NIGERIA FLOUR or generate 13.62% 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. NORTHERN NIGERIA FLOUR
Performance |
| Timeline |
Dow Jones and NORTHERN NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NORTHERN NIGERIA FLOUR
Pair trading matchups for NORTHERN NIGERIA
Pair Trading with Dow Jones and NORTHERN NIGERIA
The main advantage of trading using opposite Dow Jones and NORTHERN NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, NORTHERN NIGERIA 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 NORTHERN NIGERIA will offset losses from the drop in NORTHERN NIGERIA's long position.| Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
| NORTHERN NIGERIA vs. GUINEA INSURANCE PLC | NORTHERN NIGERIA vs. SECURE ELECTRONIC TECHNOLOGY | NORTHERN NIGERIA vs. VFD GROUP | NORTHERN NIGERIA vs. IKEJA HOTELS PLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |