Correlation Between Eurofins Scientific and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eurofins Scientific 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 Eurofins Scientific and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurofins Scientific SE and Dow Jones Industrial, you can compare the effects of market volatilities on Eurofins Scientific 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 Eurofins Scientific with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurofins Scientific and Dow Jones.
Diversification Opportunities for Eurofins Scientific and Dow Jones
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eurofins and Dow is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eurofins Scientific SE 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 Eurofins Scientific 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 Eurofins Scientific SE 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 Eurofins Scientific i.e., Eurofins Scientific and Dow Jones go up and down completely randomly.
Pair Corralation between Eurofins Scientific and Dow Jones
Assuming the 90 days horizon Eurofins Scientific is expected to generate 1.35 times less return on investment than Dow Jones. In addition to that, Eurofins Scientific is 5.07 times more volatile than Dow Jones Industrial. It trades about 0.01 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 3,867,736 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 586,730 from holding Dow Jones Industrial or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Eurofins Scientific SE vs. Dow Jones Industrial
Performance |
| Timeline |
Eurofins Scientific and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eurofins Scientific SE
Pair trading matchups for Eurofins Scientific
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eurofins Scientific and Dow Jones
The main advantage of trading using opposite Eurofins Scientific and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurofins Scientific 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.| Eurofins Scientific vs. Thermo Fisher Scientific | Eurofins Scientific vs. Illumina | Eurofins Scientific vs. Danaher | Eurofins Scientific vs. Waters |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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