Correlation Between Eagle Plains and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eagle Plains 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 Eagle Plains and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Plains Resources and Dow Jones Industrial, you can compare the effects of market volatilities on Eagle Plains 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 Eagle Plains with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Plains and Dow Jones.
Diversification Opportunities for Eagle Plains and Dow Jones
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eagle and Dow is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Plains Resources 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 Eagle Plains 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 Eagle Plains Resources 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 Eagle Plains i.e., Eagle Plains and Dow Jones go up and down completely randomly.
Pair Corralation between Eagle Plains and Dow Jones
Assuming the 90 days horizon Eagle Plains Resources is expected to generate 18.0 times more return on investment than Dow Jones. However, Eagle Plains is 18.0 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.3 per unit of risk. If you would invest 7.00 in Eagle Plains Resources on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Eagle Plains Resources or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Plains Resources vs. Dow Jones Industrial
Performance |
| Timeline |
Eagle Plains and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eagle Plains Resources
Pair trading matchups for Eagle Plains
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eagle Plains and Dow Jones
The main advantage of trading using opposite Eagle Plains and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Plains 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.| Eagle Plains vs. Norra Metals Corp | Eagle Plains vs. E79 Resources Corp | Eagle Plains vs. Voltage Metals Corp | Eagle Plains vs. Cantex Mine Development |
| Dow Jones vs. Fernhill Beverage | Dow Jones vs. Fomento Economico Mexicano | Dow Jones vs. Loud Beverage Group | Dow Jones vs. Diageo PLC ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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