Correlation Between Dow Jones and Pampa EnergÃa
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Pampa EnergÃa 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 Pampa EnergÃa 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 Pampa Energa SA, you can compare the effects of market volatilities on Dow Jones and Pampa EnergÃa 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 Pampa EnergÃa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Pampa EnergÃa.
Diversification Opportunities for Dow Jones and Pampa EnergÃa
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Pampa is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Pampa Energa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energa SA 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 Pampa EnergÃa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energa SA has no effect on the direction of Dow Jones i.e., Dow Jones and Pampa EnergÃa go up and down completely randomly.
Pair Corralation between Dow Jones and Pampa EnergÃa
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.01 times less return on investment than Pampa EnergÃa. But when comparing it to its historical volatility, Dow Jones Industrial is 5.25 times less risky than Pampa EnergÃa. It trades about 0.16 of its potential returns per unit of risk. Pampa Energa SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 160.00 in Pampa Energa SA on September 3, 2024 and sell it today you would earn a total of 72.00 from holding Pampa Energa SA or generate 45.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Pampa Energa SA
Performance |
| Timeline |
Dow Jones and Pampa EnergÃa Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pampa Energa SA
Pair trading matchups for Pampa EnergÃa
Pair Trading with Dow Jones and Pampa EnergÃa
The main advantage of trading using opposite Dow Jones and Pampa EnergÃa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Pampa EnergÃa 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 Pampa EnergÃa will offset losses from the drop in Pampa EnergÃa's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Pampa EnergÃa vs. Sapiens International | Pampa EnergÃa vs. Q2 Holdings | Pampa EnergÃa vs. DHI Group | Pampa EnergÃa vs. Patterson UTI Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |