Correlation Between GCM Resources and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GCM Resources 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 GCM Resources and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Resources Plc and Dow Jones Industrial, you can compare the effects of market volatilities on GCM Resources 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 GCM Resources with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Resources and Dow Jones.
Diversification Opportunities for GCM Resources and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GCM and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GCM Resources Plc 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 GCM Resources 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 GCM Resources Plc 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 GCM Resources i.e., GCM Resources and Dow Jones go up and down completely randomly.
Pair Corralation between GCM Resources and Dow Jones
If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCM Resources Plc vs. Dow Jones Industrial
Performance |
| Timeline |
GCM Resources and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GCM Resources Plc
Pair trading matchups for GCM Resources
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GCM Resources and Dow Jones
The main advantage of trading using opposite GCM Resources and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Resources 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.| GCM Resources vs. NACCO Industries | GCM Resources vs. Alliance Resource Partners | GCM Resources vs. Hallador Energy | GCM Resources vs. Consol Energy |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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