Correlation Between Dow Jones and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA A, you can compare the effects of market volatilities on Dow Jones and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Schibsted ASA.
Diversification Opportunities for Dow Jones and Schibsted ASA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Schibsted is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Schibsted ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA A 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA A has no effect on the direction of Dow Jones i.e., Dow Jones and Schibsted ASA go up and down completely randomly.
Pair Corralation between Dow Jones and Schibsted ASA
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.44 times less return on investment than Schibsted ASA. But when comparing it to its historical volatility, Dow Jones Industrial is 4.94 times less risky than Schibsted ASA. It trades about 0.11 of its potential returns per unit of risk. Schibsted ASA A is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,066 in Schibsted ASA A on September 4, 2024 and sell it today you would earn a total of 2,088 from holding Schibsted ASA A or generate 195.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.9% |
| Values | Daily Returns |
Dow Jones Industrial vs. Schibsted ASA A
Performance |
| Timeline |
Dow Jones and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Schibsted ASA A
Pair trading matchups for Schibsted ASA
Pair Trading with Dow Jones and Schibsted ASA
The main advantage of trading using opposite Dow Jones and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
| Schibsted ASA vs. Superior Plus Corp | Schibsted ASA vs. NMI Holdings | Schibsted ASA vs. Origin Agritech | Schibsted ASA vs. SIVERS SEMICONDUCTORS AB |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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