Correlation Between Dow Jones and Sparinvest Mellemlange
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By analyzing existing cross correlation between Dow Jones Industrial and Sparinvest Mellemlange, you can compare the effects of market volatilities on Dow Jones and Sparinvest Mellemlange 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 Sparinvest Mellemlange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sparinvest Mellemlange.
Diversification Opportunities for Dow Jones and Sparinvest Mellemlange
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Sparinvest is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sparinvest Mellemlange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Mellemlange 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 Sparinvest Mellemlange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Mellemlange has no effect on the direction of Dow Jones i.e., Dow Jones and Sparinvest Mellemlange go up and down completely randomly.
Pair Corralation between Dow Jones and Sparinvest Mellemlange
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 3.78 times more return on investment than Sparinvest Mellemlange. However, Dow Jones is 3.78 times more volatile than Sparinvest Mellemlange. It trades about 0.15 of its potential returns per unit of risk. Sparinvest Mellemlange is currently generating about 0.17 per unit of risk. If you would invest 3,868,632 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 603,574 from holding Dow Jones Industrial or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sparinvest Mellemlange
Performance |
| Timeline |
Dow Jones and Sparinvest Mellemlange Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sparinvest Mellemlange
Pair trading matchups for Sparinvest Mellemlange
Pair Trading with Dow Jones and Sparinvest Mellemlange
The main advantage of trading using opposite Dow Jones and Sparinvest Mellemlange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sparinvest Mellemlange 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 Sparinvest Mellemlange will offset losses from the drop in Sparinvest Mellemlange's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Sparinvest Mellemlange vs. Sparinvest Europa Growth | Sparinvest Mellemlange vs. Sparinvest INDEX Europa | Sparinvest Mellemlange vs. Sparinvest INDEX Hj | Sparinvest Mellemlange vs. Sparinvest SICAV Procedo |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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