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
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eureka and Dow is -0.27. 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
Assuming the 90 days horizon Eureka Acquisition is expected to generate 14.42 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Eureka Acquisition Corp is 11.28 times less risky than Dow Jones. It trades about 0.22 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,273,213 in Dow Jones Industrial on November 4, 2024 and sell it today you would earn a total of 181,253 from holding Dow Jones Industrial or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| 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. Hollywood Intermediate | Eureka Acquisition vs. ServiceNow | Eureka Acquisition vs. United Parks Resorts | Eureka Acquisition vs. Lipocine |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |