Correlation Between Dow Jones and Vakomtek
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Vakomtek 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 Vakomtek 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 Vakomtek, you can compare the effects of market volatilities on Dow Jones and Vakomtek 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 Vakomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Vakomtek.
Diversification Opportunities for Dow Jones and Vakomtek
Pay attention - limited upside
The 3 months correlation between Dow and Vakomtek is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Vakomtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vakomtek 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 Vakomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vakomtek has no effect on the direction of Dow Jones i.e., Dow Jones and Vakomtek go up and down completely randomly.
Pair Corralation between Dow Jones and Vakomtek
Assuming the 90 days trading horizon Dow Jones is expected to generate 8.57 times less return on investment than Vakomtek. But when comparing it to its historical volatility, Dow Jones Industrial is 16.95 times less risky than Vakomtek. It trades about 0.12 of its potential returns per unit of risk. Vakomtek is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Vakomtek on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Vakomtek or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.02% |
| Values | Daily Returns |
Dow Jones Industrial vs. Vakomtek
Performance |
| Timeline |
Dow Jones and Vakomtek Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Vakomtek
Pair trading matchups for Vakomtek
Pair Trading with Dow Jones and Vakomtek
The main advantage of trading using opposite Dow Jones and Vakomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Vakomtek 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 Vakomtek will offset losses from the drop in Vakomtek's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| Vakomtek vs. Intersport Polska SA | Vakomtek vs. Road Studio SA | Vakomtek vs. Marie Brizard Wine | Vakomtek vs. Saule Technologies SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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