Correlation Between Dow Jones and Vigo System
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Vigo System 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 Vigo System 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 Vigo System SA, you can compare the effects of market volatilities on Dow Jones and Vigo System 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 Vigo System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Vigo System.
Diversification Opportunities for Dow Jones and Vigo System
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Vigo is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Vigo System SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vigo System SA 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 Vigo System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vigo System SA has no effect on the direction of Dow Jones i.e., Dow Jones and Vigo System go up and down completely randomly.
Pair Corralation between Dow Jones and Vigo System
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.52 times more return on investment than Vigo System. However, Dow Jones Industrial is 1.91 times less risky than Vigo System. It trades about 0.25 of its potential returns per unit of risk. Vigo System SA is currently generating about -0.21 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 233,449 from holding Dow Jones Industrial or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. Vigo System SA
Performance |
| Timeline |
Dow Jones and Vigo System Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Vigo System SA
Pair trading matchups for Vigo System
Pair Trading with Dow Jones and Vigo System
The main advantage of trading using opposite Dow Jones and Vigo System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Vigo System 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 Vigo System will offset losses from the drop in Vigo System's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Vigo System vs. Banco Santander SA | Vigo System vs. UniCredit SpA | Vigo System vs. CEZ as | Vigo System vs. Polski Koncern Naftowy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |