Correlation Between Eolus Vind and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eolus Vind 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 Eolus Vind and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eolus Vind AB and Dow Jones Industrial, you can compare the effects of market volatilities on Eolus Vind 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 Eolus Vind with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eolus Vind and Dow Jones.
Diversification Opportunities for Eolus Vind and Dow Jones
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eolus and Dow is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eolus Vind 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 Eolus Vind 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 Eolus Vind 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 Eolus Vind i.e., Eolus Vind and Dow Jones go up and down completely randomly.
Pair Corralation between Eolus Vind and Dow Jones
Assuming the 90 days trading horizon Eolus Vind AB is expected to under-perform the Dow Jones. In addition to that, Eolus Vind is 3.37 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,378,148 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 1,094,058 from holding Dow Jones Industrial or generate 32.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Eolus Vind AB vs. Dow Jones Industrial
Performance |
| Timeline |
Eolus Vind and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eolus Vind AB
Pair trading matchups for Eolus Vind
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eolus Vind and Dow Jones
The main advantage of trading using opposite Eolus Vind and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eolus Vind 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.| Eolus Vind vs. NOTE AB | Eolus Vind vs. Zaptec AS | Eolus Vind vs. SolTech Energy Sweden | Eolus Vind vs. Scatec Solar OL |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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