Correlation Between Dow Jones and Wesure Global
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Wesure Global 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 Wesure Global 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 Wesure Global Tech, you can compare the effects of market volatilities on Dow Jones and Wesure Global 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 Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Wesure Global.
Diversification Opportunities for Dow Jones and Wesure Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Wesure is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Dow Jones i.e., Dow Jones and Wesure Global go up and down completely randomly.
Pair Corralation between Dow Jones and Wesure Global
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.69 times less return on investment than Wesure Global. But when comparing it to its historical volatility, Dow Jones Industrial is 4.97 times less risky than Wesure Global. It trades about 0.08 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20,880 in Wesure Global Tech on August 29, 2024 and sell it today you would earn a total of 27,340 from holding Wesure Global Tech or generate 130.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.78% |
| Values | Daily Returns |
Dow Jones Industrial vs. Wesure Global Tech
Performance |
| Timeline |
Dow Jones and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Wesure Global Tech
Pair trading matchups for Wesure Global
Pair Trading with Dow Jones and Wesure Global
The main advantage of trading using opposite Dow Jones and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global's long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| Wesure Global vs. Brainsway | Wesure Global vs. Mivne Real Estate | Wesure Global vs. Photomyne | Wesure Global vs. Bezeq Israeli Telecommunication |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |