Correlation Between Embark Commodity and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Embark Commodity 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 Embark Commodity and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embark Commodity Strategy and Dow Jones Industrial, you can compare the effects of market volatilities on Embark Commodity 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 Embark Commodity with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Commodity and Dow Jones.
Diversification Opportunities for Embark Commodity and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Embark and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Embark Commodity Strategy 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 Embark Commodity 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 Embark Commodity Strategy 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 Embark Commodity i.e., Embark Commodity and Dow Jones go up and down completely randomly.
Pair Corralation between Embark Commodity and Dow Jones
Assuming the 90 days horizon Embark Commodity Strategy is expected to generate 0.97 times more return on investment than Dow Jones. However, Embark Commodity Strategy is 1.04 times less risky than Dow Jones. It trades about 0.39 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of risk. If you would invest 1,006 in Embark Commodity Strategy on October 26, 2024 and sell it today you would earn a total of 56.00 from holding Embark Commodity Strategy or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Embark Commodity Strategy vs. Dow Jones Industrial
Performance |
| Timeline |
Embark Commodity and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Embark Commodity Strategy
Pair trading matchups for Embark Commodity
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Embark Commodity and Dow Jones
The main advantage of trading using opposite Embark Commodity and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Commodity 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.| Embark Commodity vs. John Hancock Money | Embark Commodity vs. Prudential Government Money | Embark Commodity vs. Dws Government Money | Embark Commodity vs. Elfun Government Money |
| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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