Correlation Between Genomtec and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Genomtec 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 Genomtec and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genomtec SA and Dow Jones Industrial, you can compare the effects of market volatilities on Genomtec 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 Genomtec with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genomtec and Dow Jones.
Diversification Opportunities for Genomtec and Dow Jones
Very good diversification
The 3 months correlation between Genomtec and Dow is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Genomtec 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 Genomtec 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 Genomtec 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 Genomtec i.e., Genomtec and Dow Jones go up and down completely randomly.
Pair Corralation between Genomtec and Dow Jones
Assuming the 90 days trading horizon Genomtec SA is expected to under-perform the Dow Jones. In addition to that, Genomtec is 2.76 times more volatile than Dow Jones Industrial. It trades about -0.35 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.36 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 298,740 from holding Dow Jones Industrial or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genomtec SA vs. Dow Jones Industrial
Performance |
| Timeline |
Genomtec and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Genomtec SA
Pair trading matchups for Genomtec
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Genomtec and Dow Jones
The main advantage of trading using opposite Genomtec and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genomtec 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.| Genomtec vs. Inter Cars SA | Genomtec vs. GreenX Metals | Genomtec vs. LSI Software SA | Genomtec vs. Skyline Investment SA |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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