Correlation Between Dow Jones and Groupe Partouche
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Groupe Partouche 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 Groupe Partouche 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 Groupe Partouche SA, you can compare the effects of market volatilities on Dow Jones and Groupe Partouche 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 Groupe Partouche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Groupe Partouche.
Diversification Opportunities for Dow Jones and Groupe Partouche
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Groupe is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche 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 Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Dow Jones i.e., Dow Jones and Groupe Partouche go up and down completely randomly.
Pair Corralation between Dow Jones and Groupe Partouche
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.33 times more return on investment than Groupe Partouche. However, Dow Jones Industrial is 3.0 times less risky than Groupe Partouche. It trades about -0.22 of its potential returns per unit of risk. Groupe Partouche SA is currently generating about -0.24 per unit of risk. If you would invest 4,471,358 in Dow Jones Industrial on November 27, 2024 and sell it today you would lose (125,237) from holding Dow Jones Industrial or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dow Jones Industrial vs. Groupe Partouche SA
Performance |
| Timeline |
Dow Jones and Groupe Partouche Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Groupe Partouche SA
Pair trading matchups for Groupe Partouche
Pair Trading with Dow Jones and Groupe Partouche
The main advantage of trading using opposite Dow Jones and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Groupe Partouche 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 Groupe Partouche will offset losses from the drop in Groupe Partouche's long position.The idea behind Dow Jones Industrial and Groupe Partouche SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Groupe Partouche vs. Passat Socit Anonyme | Groupe Partouche vs. Plastiques du Val | Groupe Partouche vs. NRJ Group | Groupe Partouche vs. Haulotte Group SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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