Correlation Between Dow Jones and NaturalShrimp
Can any of the company-specific risk be diversified away by investing in both Dow Jones and NaturalShrimp 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 NaturalShrimp 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 NaturalShrimp, you can compare the effects of market volatilities on Dow Jones and NaturalShrimp 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 NaturalShrimp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NaturalShrimp.
Diversification Opportunities for Dow Jones and NaturalShrimp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and NaturalShrimp is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NaturalShrimp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NaturalShrimp 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 NaturalShrimp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NaturalShrimp has no effect on the direction of Dow Jones i.e., Dow Jones and NaturalShrimp go up and down completely randomly.
Pair Corralation between Dow Jones and NaturalShrimp
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the NaturalShrimp. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 85.02 times less risky than NaturalShrimp. The index trades about -0.12 of its potential returns per unit of risk. The NaturalShrimp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.05 in NaturalShrimp on January 24, 2025 and sell it today you would lose (0.04) from holding NaturalShrimp or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. NaturalShrimp
Performance |
| Timeline |
Dow Jones and NaturalShrimp Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NaturalShrimp
Pair trading matchups for NaturalShrimp
Pair Trading with Dow Jones and NaturalShrimp
The main advantage of trading using opposite Dow Jones and NaturalShrimp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, NaturalShrimp 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 NaturalShrimp will offset losses from the drop in NaturalShrimp's long position.| Dow Jones vs. Academy Sports Outdoors | Dow Jones vs. United Parks Resorts | Dow Jones vs. Tyson Foods | Dow Jones vs. AMCON Distributing |
| NaturalShrimp vs. AgriFORCE Growing Systems | NaturalShrimp vs. Atlantic Sapphire ASA | NaturalShrimp vs. Village Farms International | NaturalShrimp vs. Australian Agricultural |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |