Correlation Between Financiere Moncey and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Financiere Moncey 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 Financiere Moncey and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financiere Moncey SA and Dow Jones Industrial, you can compare the effects of market volatilities on Financiere Moncey 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 Financiere Moncey with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financiere Moncey and Dow Jones.
Diversification Opportunities for Financiere Moncey and Dow Jones
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Financiere and Dow is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Financiere Moncey SA 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 Financiere Moncey 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 Financiere Moncey SA 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 Financiere Moncey i.e., Financiere Moncey and Dow Jones go up and down completely randomly.
Pair Corralation between Financiere Moncey and Dow Jones
Assuming the 90 days trading horizon Financiere Moncey SA is expected to generate 377.84 times more return on investment than Dow Jones. However, Financiere Moncey is 377.84 times more volatile than Dow Jones Industrial. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 760,000 in Financiere Moncey SA on October 18, 2024 and sell it today you would lose (746,098) from holding Financiere Moncey SA or give up 98.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Financiere Moncey SA vs. Dow Jones Industrial
Performance |
| Timeline |
Financiere Moncey and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Financiere Moncey SA
Pair trading matchups for Financiere Moncey
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Financiere Moncey and Dow Jones
The main advantage of trading using opposite Financiere Moncey and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financiere Moncey 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.| Financiere Moncey vs. LVMH Mot Hennessy | Financiere Moncey vs. LOreal SA | Financiere Moncey vs. Hermes International SCA | Financiere Moncey vs. Manitou BF SA |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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