Correlation Between Dow Jones and Petrokent Turizm
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Petrokent Turizm 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 Petrokent Turizm 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 Petrokent Turizm AS, you can compare the effects of market volatilities on Dow Jones and Petrokent Turizm 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 Petrokent Turizm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Petrokent Turizm.
Diversification Opportunities for Dow Jones and Petrokent Turizm
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Petrokent is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Petrokent Turizm AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrokent Turizm 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 Petrokent Turizm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrokent Turizm has no effect on the direction of Dow Jones i.e., Dow Jones and Petrokent Turizm go up and down completely randomly.
Pair Corralation between Dow Jones and Petrokent Turizm
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.31 times less return on investment than Petrokent Turizm. But when comparing it to its historical volatility, Dow Jones Industrial is 5.95 times less risky than Petrokent Turizm. It trades about 0.07 of its potential returns per unit of risk. Petrokent Turizm AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,370 in Petrokent Turizm AS on October 7, 2024 and sell it today you would earn a total of 12,130 from holding Petrokent Turizm AS or generate 84.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. Petrokent Turizm AS
Performance |
| Timeline |
Dow Jones and Petrokent Turizm Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Petrokent Turizm AS
Pair trading matchups for Petrokent Turizm
Pair Trading with Dow Jones and Petrokent Turizm
The main advantage of trading using opposite Dow Jones and Petrokent Turizm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Petrokent Turizm 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 Petrokent Turizm will offset losses from the drop in Petrokent Turizm's long position.| Dow Jones vs. NetSol Technologies | Dow Jones vs. Q2 Holdings | Dow Jones vs. Weyco Group | Dow Jones vs. Newell Brands |
| Petrokent Turizm vs. Qnb Finansbank AS | Petrokent Turizm vs. Datagate Bilgisayar Malzemeleri | Petrokent Turizm vs. Akcansa Cimento Sanayi | Petrokent Turizm vs. ICBC Turkey Bank |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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