Correlation Between Fastned BV and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Fastned BV 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 Fastned BV and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fastned BV and Dow Jones Industrial, you can compare the effects of market volatilities on Fastned BV 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 Fastned BV with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastned BV and Dow Jones.
Diversification Opportunities for Fastned BV and Dow Jones
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fastned and Dow is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fastned BV 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 Fastned BV 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 Fastned BV 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 Fastned BV i.e., Fastned BV and Dow Jones go up and down completely randomly.
Pair Corralation between Fastned BV and Dow Jones
Assuming the 90 days trading horizon Fastned BV is expected to under-perform the Dow Jones. In addition to that, Fastned BV is 3.27 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 0.11 per unit of volatility. If you would invest 3,815,030 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 658,627 from holding Dow Jones Industrial or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Fastned BV vs. Dow Jones Industrial
Performance |
| Timeline |
Fastned BV and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Fastned BV
Pair trading matchups for Fastned BV
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Fastned BV and Dow Jones
The main advantage of trading using opposite Fastned BV and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastned BV 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.| Fastned BV vs. Alfen Beheer BV | Fastned BV vs. BE Semiconductor Industries | Fastned BV vs. Just Eat Takeaway | Fastned BV vs. PostNL NV |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |