Correlation Between Dow Jones and Wallenius Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Wallenius Wilhelmsen 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 Wallenius Wilhelmsen 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 Wallenius Wilhelmsen Logistics, you can compare the effects of market volatilities on Dow Jones and Wallenius Wilhelmsen 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 Wallenius Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Wallenius Wilhelmsen.
Diversification Opportunities for Dow Jones and Wallenius Wilhelmsen
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Wallenius is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Wallenius Wilhelmsen Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallenius Wilhelmsen 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 Wallenius Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallenius Wilhelmsen has no effect on the direction of Dow Jones i.e., Dow Jones and Wallenius Wilhelmsen go up and down completely randomly.
Pair Corralation between Dow Jones and Wallenius Wilhelmsen
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.35 times less return on investment than Wallenius Wilhelmsen. But when comparing it to its historical volatility, Dow Jones Industrial is 3.51 times less risky than Wallenius Wilhelmsen. It trades about 0.08 of its potential returns per unit of risk. Wallenius Wilhelmsen Logistics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,570 in Wallenius Wilhelmsen Logistics on September 3, 2024 and sell it today you would earn a total of 2,180 from holding Wallenius Wilhelmsen Logistics or generate 25.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dow Jones Industrial vs. Wallenius Wilhelmsen Logistics
Performance |
| Timeline |
Dow Jones and Wallenius Wilhelmsen Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Wallenius Wilhelmsen Logistics
Pair trading matchups for Wallenius Wilhelmsen
Pair Trading with Dow Jones and Wallenius Wilhelmsen
The main advantage of trading using opposite Dow Jones and Wallenius Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Wallenius Wilhelmsen 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 Wallenius Wilhelmsen will offset losses from the drop in Wallenius Wilhelmsen's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Wallenius Wilhelmsen vs. Hoegh Autoliners ASA | Wallenius Wilhelmsen vs. Stolt Nielsen Limited | Wallenius Wilhelmsen vs. MPC Container Ships | Wallenius Wilhelmsen vs. Aker BP ASA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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