Correlation Between Dow Jones and Swedish Match
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Swedish Match 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 Swedish Match 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 Swedish Match Ab, you can compare the effects of market volatilities on Dow Jones and Swedish Match 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 Swedish Match. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Swedish Match.
Diversification Opportunities for Dow Jones and Swedish Match
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Swedish is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Swedish Match Ab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Match 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 Swedish Match. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Match Ab has no effect on the direction of Dow Jones i.e., Dow Jones and Swedish Match go up and down completely randomly.
Pair Corralation between Dow Jones and Swedish Match
If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Dow Jones Industrial vs. Swedish Match Ab
Performance |
| Timeline |
Dow Jones and Swedish Match Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Swedish Match Ab
Pair trading matchups for Swedish Match
Pair Trading with Dow Jones and Swedish Match
The main advantage of trading using opposite Dow Jones and Swedish Match positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Swedish Match 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 Swedish Match will offset losses from the drop in Swedish Match's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Swedish Match vs. Nomura Holdings ADR | Swedish Match vs. Globalfoundries | Swedish Match vs. Artisan Partners Asset | Swedish Match vs. Valens |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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