Correlation Between Dow Jones and Sparinvest INDEX
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By analyzing existing cross correlation between Dow Jones Industrial and Sparinvest INDEX Mellem, you can compare the effects of market volatilities on Dow Jones and Sparinvest INDEX 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 INDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sparinvest INDEX.
Diversification Opportunities for Dow Jones and Sparinvest INDEX
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Sparinvest is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sparinvest INDEX Mellem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest INDEX Mellem 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 INDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest INDEX Mellem has no effect on the direction of Dow Jones i.e., Dow Jones and Sparinvest INDEX go up and down completely randomly.
Pair Corralation between Dow Jones and Sparinvest INDEX
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.79 times more return on investment than Sparinvest INDEX. However, Dow Jones is 1.79 times more volatile than Sparinvest INDEX Mellem. It trades about 0.11 of its potential returns per unit of risk. Sparinvest INDEX Mellem is currently generating about 0.12 per unit of risk. If you would invest 3,858,519 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 632,546 from holding Dow Jones Industrial or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sparinvest INDEX Mellem
Performance |
| Timeline |
Dow Jones and Sparinvest INDEX Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sparinvest INDEX Mellem
Pair trading matchups for Sparinvest INDEX
Pair Trading with Dow Jones and Sparinvest INDEX
The main advantage of trading using opposite Dow Jones and Sparinvest INDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sparinvest INDEX 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 INDEX will offset losses from the drop in Sparinvest INDEX's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Sparinvest INDEX vs. Jyske Invest Nye | Sparinvest INDEX vs. Jyske Invest Korte | Sparinvest INDEX vs. Jyske Invest Nye | Sparinvest INDEX vs. Jyske Invest Virksomhedsobligationer |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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