Correlation Between GFPT Public and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GFPT Public 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 GFPT Public and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFPT Public and Dow Jones Industrial, you can compare the effects of market volatilities on GFPT Public 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 GFPT Public with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFPT Public and Dow Jones.
Diversification Opportunities for GFPT Public and Dow Jones
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GFPT and Dow is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public 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 GFPT Public 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 GFPT Public 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 GFPT Public i.e., GFPT Public and Dow Jones go up and down completely randomly.
Pair Corralation between GFPT Public and Dow Jones
Assuming the 90 days trading horizon GFPT Public is expected to under-perform the Dow Jones. In addition to that, GFPT Public is 1.93 times more volatile than Dow Jones Industrial. It trades about -0.14 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of volatility. If you would invest 4,133,505 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 352,526 from holding Dow Jones Industrial or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
GFPT Public vs. Dow Jones Industrial
Performance |
| Timeline |
GFPT Public and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GFPT Public
Pair trading matchups for GFPT Public
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GFPT Public and Dow Jones
The main advantage of trading using opposite GFPT Public and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFPT Public 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.| GFPT Public vs. Charoen Pokphand Foods | GFPT Public vs. Hana Microelectronics Public | GFPT Public vs. AP Public | GFPT Public vs. Thai Vegetable Oil |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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