Correlation Between Eureka Acquisition and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eureka Acquisition 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 Eureka Acquisition and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eureka Acquisition Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Eureka Acquisition 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 Eureka Acquisition with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Acquisition and Dow Jones.
Diversification Opportunities for Eureka Acquisition and Dow Jones
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eureka and Dow is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Acquisition Corp 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 Eureka Acquisition 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 Eureka Acquisition Corp 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 Eureka Acquisition i.e., Eureka Acquisition and Dow Jones go up and down completely randomly.
Pair Corralation between Eureka Acquisition and Dow Jones
Given the investment horizon of 90 days Eureka Acquisition Corp is expected to generate 188.01 times more return on investment than Dow Jones. However, Eureka Acquisition is 188.01 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 0.00 in Eureka Acquisition Corp on August 27, 2024 and sell it today you would earn a total of 1,012 from holding Eureka Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 10.89% |
| Values | Daily Returns |
Eureka Acquisition Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Eureka Acquisition and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eureka Acquisition Corp
Pair trading matchups for Eureka Acquisition
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eureka Acquisition and Dow Jones
The main advantage of trading using opposite Eureka Acquisition and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eureka Acquisition 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.| Eureka Acquisition vs. Voyager Acquisition Corp | Eureka Acquisition vs. YHN Acquisition I | Eureka Acquisition vs. Vine Hill Capital | Eureka Acquisition vs. DP Cap Acquisition |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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