Correlation Between Dow Jones and OCUP Old
Can any of the company-specific risk be diversified away by investing in both Dow Jones and OCUP Old 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 OCUP Old 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 OCUP Old, you can compare the effects of market volatilities on Dow Jones and OCUP Old 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 OCUP Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and OCUP Old.
Diversification Opportunities for Dow Jones and OCUP Old
Good diversification
The 3 months correlation between Dow and OCUP is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and OCUP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCUP Old 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 OCUP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCUP Old has no effect on the direction of Dow Jones i.e., Dow Jones and OCUP Old go up and down completely randomly.
Pair Corralation between Dow Jones and OCUP Old
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.15 times more return on investment than OCUP Old. However, Dow Jones Industrial is 6.53 times less risky than OCUP Old. It trades about 0.07 of its potential returns per unit of risk. OCUP Old is currently generating about -0.03 per unit of risk. If you would invest 3,362,956 in Dow Jones Industrial on October 12, 2024 and sell it today you would earn a total of 900,564 from holding Dow Jones Industrial or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.52% |
| Values | Daily Returns |
Dow Jones Industrial vs. OCUP Old
Performance |
| Timeline |
Dow Jones and OCUP Old Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
OCUP Old
Pair trading matchups for OCUP Old
Pair Trading with Dow Jones and OCUP Old
The main advantage of trading using opposite Dow Jones and OCUP Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, OCUP Old 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 OCUP Old will offset losses from the drop in OCUP Old's long position.| Dow Jones vs. Lululemon Athletica | Dow Jones vs. Vistra Energy Corp | Dow Jones vs. The Gap, | Dow Jones vs. Pool Corporation |
| OCUP Old vs. Reviva Pharmaceuticals Holdings | OCUP Old vs. Protalix Biotherapeutics | OCUP Old vs. Eyepoint Pharmaceuticals | OCUP Old vs. Sellas Life Sciences |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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