Correlation Between Dow Jones and ROKMASTER Resources
Can any of the company-specific risk be diversified away by investing in both Dow Jones and ROKMASTER Resources 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 ROKMASTER Resources 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 ROKMASTER Resources Corp, you can compare the effects of market volatilities on Dow Jones and ROKMASTER Resources 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 ROKMASTER Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and ROKMASTER Resources.
Diversification Opportunities for Dow Jones and ROKMASTER Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and ROKMASTER is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and ROKMASTER Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROKMASTER Resources Corp 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 ROKMASTER Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROKMASTER Resources Corp has no effect on the direction of Dow Jones i.e., Dow Jones and ROKMASTER Resources go up and down completely randomly.
Pair Corralation between Dow Jones and ROKMASTER Resources
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the ROKMASTER Resources. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 24.22 times less risky than ROKMASTER Resources. The index trades about -0.21 of its potential returns per unit of risk. The ROKMASTER Resources Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.00 in ROKMASTER Resources Corp on September 25, 2024 and sell it today you would earn a total of 0.00 from holding ROKMASTER Resources Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. ROKMASTER Resources Corp
Performance |
| Timeline |
Dow Jones and ROKMASTER Resources Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
ROKMASTER Resources Corp
Pair trading matchups for ROKMASTER Resources
Pair Trading with Dow Jones and ROKMASTER Resources
The main advantage of trading using opposite Dow Jones and ROKMASTER Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, ROKMASTER Resources 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 ROKMASTER Resources will offset losses from the drop in ROKMASTER Resources' long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. Lion One Metals | Dow Jones vs. Blue Moon Metals | Dow Jones vs. Xunlei Ltd Adr |
| ROKMASTER Resources vs. Monarca Minerals | ROKMASTER Resources vs. Outcrop Gold Corp | ROKMASTER Resources vs. Grande Portage Resources | ROKMASTER Resources vs. Klondike Silver 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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