Correlation Between Dow Jones and SaveLend Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and SaveLend Group 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 SaveLend Group 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 SaveLend Group AB, you can compare the effects of market volatilities on Dow Jones and SaveLend Group 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 SaveLend Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SaveLend Group.
Diversification Opportunities for Dow Jones and SaveLend Group
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and SaveLend is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SaveLend Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SaveLend Group AB 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 SaveLend Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SaveLend Group AB has no effect on the direction of Dow Jones i.e., Dow Jones and SaveLend Group go up and down completely randomly.
Pair Corralation between Dow Jones and SaveLend Group
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than SaveLend Group. However, Dow Jones Industrial is 4.71 times less risky than SaveLend Group. It trades about 0.14 of its potential returns per unit of risk. SaveLend Group AB is currently generating about -0.07 per unit of risk. If you would invest 3,885,227 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 605,838 from holding Dow Jones Industrial or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. SaveLend Group AB
Performance |
| Timeline |
Dow Jones and SaveLend Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SaveLend Group AB
Pair trading matchups for SaveLend Group
Pair Trading with Dow Jones and SaveLend Group
The main advantage of trading using opposite Dow Jones and SaveLend Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SaveLend Group 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 SaveLend Group will offset losses from the drop in SaveLend Group's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| SaveLend Group vs. Smart Eye AB | SaveLend Group vs. Nepa AB | SaveLend Group vs. MAG Interactive AB | SaveLend Group vs. Hexatronic Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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