Correlation Between Dow Jones and Questor Technology
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Questor Technology 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 Questor Technology 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 Questor Technology, you can compare the effects of market volatilities on Dow Jones and Questor Technology 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 Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Questor Technology.
Diversification Opportunities for Dow Jones and Questor Technology
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Questor is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology 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 Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Dow Jones i.e., Dow Jones and Questor Technology go up and down completely randomly.
Pair Corralation between Dow Jones and Questor Technology
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.19 times more return on investment than Questor Technology. However, Dow Jones Industrial is 5.29 times less risky than Questor Technology. It trades about 0.08 of its potential returns per unit of risk. Questor Technology is currently generating about -0.05 per unit of risk. If you would invest 3,394,710 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. Questor Technology
Performance |
| Timeline |
Dow Jones and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Questor Technology
Pair trading matchups for Questor Technology
Pair Trading with Dow Jones and Questor Technology
The main advantage of trading using opposite Dow Jones and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Questor Technology 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Questor Technology vs. ECN Capital Corp | Questor Technology vs. Martinrea International | Questor Technology vs. CCL Industries | Questor Technology vs. FirstService Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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