Correlation Between Dow Jones and Svolder AB
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Svolder AB 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 Svolder AB 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 Svolder AB, you can compare the effects of market volatilities on Dow Jones and Svolder AB 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 Svolder AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Svolder AB.
Diversification Opportunities for Dow Jones and Svolder AB
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Svolder is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Svolder AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svolder AB 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 Svolder AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svolder AB has no effect on the direction of Dow Jones i.e., Dow Jones and Svolder AB go up and down completely randomly.
Pair Corralation between Dow Jones and Svolder AB
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.18 times more return on investment than Svolder AB. However, Dow Jones Industrial is 5.53 times less risky than Svolder AB. It trades about 0.1 of its potential returns per unit of risk. Svolder AB is currently generating about 0.02 per unit of risk. If you would invest 3,522,769 in Dow Jones Industrial on September 13, 2024 and sell it today you would earn a total of 892,087 from holding Dow Jones Industrial or generate 25.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.15% |
| Values | Daily Returns |
Dow Jones Industrial vs. Svolder AB
Performance |
| Timeline |
Dow Jones and Svolder AB Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Svolder AB
Pair trading matchups for Svolder AB
Pair Trading with Dow Jones and Svolder AB
The main advantage of trading using opposite Dow Jones and Svolder AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Svolder AB 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 Svolder AB will offset losses from the drop in Svolder AB's long position.| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
| Svolder AB vs. Svolder AB | Svolder AB vs. Creades AB | Svolder AB vs. Kinnevik Investment AB | Svolder AB vs. Systemair AB |
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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