Correlation Between Dow Jones and 126650DU1
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By analyzing existing cross correlation between Dow Jones Industrial and CVS 525 21 FEB 33, you can compare the effects of market volatilities on Dow Jones and 126650DU1 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 126650DU1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and 126650DU1.
Diversification Opportunities for Dow Jones and 126650DU1
Pay attention - limited upside
The 3 months correlation between Dow and 126650DU1 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CVS 525 21 FEB 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS 525 21 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 126650DU1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS 525 21 has no effect on the direction of Dow Jones i.e., Dow Jones and 126650DU1 go up and down completely randomly.
Pair Corralation between Dow Jones and 126650DU1
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.95 times more return on investment than 126650DU1. However, Dow Jones Industrial is 1.06 times less risky than 126650DU1. It trades about 0.3 of its potential returns per unit of risk. CVS 525 21 FEB 33 is currently generating about -0.16 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 276,911 from holding Dow Jones Industrial or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. CVS 525 21 FEB 33
Performance |
| Timeline |
Dow Jones and 126650DU1 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CVS 525 21 FEB 33
Pair trading matchups for 126650DU1
Pair Trading with Dow Jones and 126650DU1
The main advantage of trading using opposite Dow Jones and 126650DU1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, 126650DU1 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 126650DU1 will offset losses from the drop in 126650DU1's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| 126650DU1 vs. The Wendys Co | 126650DU1 vs. NioCorp Developments Ltd | 126650DU1 vs. IPG Photonics | 126650DU1 vs. Consol Energy |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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