Correlation Between Dow Jones and 66977WAP4
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By analyzing existing cross correlation between Dow Jones Industrial and Nova Chemicals 5, you can compare the effects of market volatilities on Dow Jones and 66977WAP4 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 66977WAP4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and 66977WAP4.
Diversification Opportunities for Dow Jones and 66977WAP4
Very good diversification
The 3 months correlation between Dow and 66977WAP4 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nova Chemicals 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Chemicals 5 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 66977WAP4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Chemicals 5 has no effect on the direction of Dow Jones i.e., Dow Jones and 66977WAP4 go up and down completely randomly.
Pair Corralation between Dow Jones and 66977WAP4
Assuming the 90 days trading horizon Dow Jones is expected to generate 46.58 times less return on investment than 66977WAP4. But when comparing it to its historical volatility, Dow Jones Industrial is 94.75 times less risky than 66977WAP4. It trades about 0.12 of its potential returns per unit of risk. Nova Chemicals 5 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,700 in Nova Chemicals 5 on August 31, 2024 and sell it today you would lose (137.00) from holding Nova Chemicals 5 or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.31% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nova Chemicals 5
Performance |
| Timeline |
Dow Jones and 66977WAP4 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nova Chemicals 5
Pair trading matchups for 66977WAP4
Pair Trading with Dow Jones and 66977WAP4
The main advantage of trading using opposite Dow Jones and 66977WAP4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, 66977WAP4 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 66977WAP4 will offset losses from the drop in 66977WAP4'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 |
| 66977WAP4 vs. Addus HomeCare | 66977WAP4 vs. Ryanair Holdings PLC | 66977WAP4 vs. Ihuman Inc | 66977WAP4 vs. China Clean 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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