Correlation Between Dow Jones and Trifork Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Trifork Holding 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 Trifork Holding 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 Trifork Holding AG, you can compare the effects of market volatilities on Dow Jones and Trifork Holding 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 Trifork Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Trifork Holding.
Diversification Opportunities for Dow Jones and Trifork Holding
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Trifork is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Trifork Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trifork Holding AG 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 Trifork Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trifork Holding AG has no effect on the direction of Dow Jones i.e., Dow Jones and Trifork Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Trifork Holding
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.31 times more return on investment than Trifork Holding. However, Dow Jones Industrial is 3.18 times less risky than Trifork Holding. It trades about 0.09 of its potential returns per unit of risk. Trifork Holding AG is currently generating about -0.07 per unit of risk. If you would invest 3,389,102 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,040,549 from holding Dow Jones Industrial or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Dow Jones Industrial vs. Trifork Holding AG
Performance |
| Timeline |
Dow Jones and Trifork Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Trifork Holding AG
Pair trading matchups for Trifork Holding
Pair Trading with Dow Jones and Trifork Holding
The main advantage of trading using opposite Dow Jones and Trifork Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Trifork Holding 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 Trifork Holding will offset losses from the drop in Trifork Holding's long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| Trifork Holding vs. Netcompany Group AS | Trifork Holding vs. cBrain AS | Trifork Holding vs. ALK Abell AS | Trifork Holding vs. Green Hydrogen Systems |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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