Correlation Between FlatexDEGIRO and Dow Jones
Can any of the company-specific risk be diversified away by investing in both FlatexDEGIRO 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 FlatexDEGIRO and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between flatexDEGIRO AG and Dow Jones Industrial, you can compare the effects of market volatilities on FlatexDEGIRO 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 FlatexDEGIRO with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlatexDEGIRO and Dow Jones.
Diversification Opportunities for FlatexDEGIRO and Dow Jones
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between FlatexDEGIRO and Dow is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding flatexDEGIRO AG 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 FlatexDEGIRO 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 flatexDEGIRO AG 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 FlatexDEGIRO i.e., FlatexDEGIRO and Dow Jones go up and down completely randomly.
Pair Corralation between FlatexDEGIRO and Dow Jones
Assuming the 90 days horizon flatexDEGIRO AG is expected to generate 3.89 times more return on investment than Dow Jones. However, FlatexDEGIRO is 3.89 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 1,043 in flatexDEGIRO AG on September 15, 2024 and sell it today you would earn a total of 472.00 from holding flatexDEGIRO AG or generate 45.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.26% |
| Values | Daily Returns |
flatexDEGIRO AG vs. Dow Jones Industrial
Performance |
| Timeline |
FlatexDEGIRO and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
flatexDEGIRO AG
Pair trading matchups for FlatexDEGIRO
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with FlatexDEGIRO and Dow Jones
The main advantage of trading using opposite FlatexDEGIRO and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlatexDEGIRO 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.| FlatexDEGIRO vs. Riot Blockchain | FlatexDEGIRO vs. Hut 8 Corp | FlatexDEGIRO vs. CleanSpark | FlatexDEGIRO vs. Bit Digital |
| Dow Jones vs. Wallbox NV | Dow Jones vs. LithiumBank Resources Corp | Dow Jones vs. Marine Products | Dow Jones vs. Arrow Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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