Correlation Between Eastnine and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eastnine and Dow Jones 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 Eastnine and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastnine AB and Dow Jones Industrial, you can compare the effects of market volatilities on Eastnine and Dow Jones 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 Eastnine with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastnine and Dow Jones.
Diversification Opportunities for Eastnine and Dow Jones
Very weak diversification
The 3 months correlation between Eastnine and Dow is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eastnine AB and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Eastnine 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 Eastnine AB are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Eastnine i.e., Eastnine and Dow Jones go up and down completely randomly.
Pair Corralation between Eastnine and Dow Jones
Assuming the 90 days trading horizon Eastnine AB is expected to generate 4.26 times more return on investment than Dow Jones. However, Eastnine is 4.26 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.0 per unit of risk. If you would invest 4,540 in Eastnine AB on September 13, 2024 and sell it today you would earn a total of 208.00 from holding Eastnine AB or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eastnine AB vs. Dow Jones Industrial
Performance |
| Timeline |
Eastnine and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eastnine AB
Pair trading matchups for Eastnine
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eastnine and Dow Jones
The main advantage of trading using opposite Eastnine and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastnine position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Eastnine vs. Catella AB | Eastnine vs. Catella AB A | Eastnine vs. KABE Group AB | Eastnine vs. IAR Systems Group |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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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