Correlation Between Hydract AS and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hydract AS 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 Hydract AS and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydract AS and Dow Jones Industrial, you can compare the effects of market volatilities on Hydract AS 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 Hydract AS with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydract AS and Dow Jones.
Diversification Opportunities for Hydract AS and Dow Jones
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hydract and Dow is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hydract AS 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 Hydract AS 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 Hydract AS 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 Hydract AS i.e., Hydract AS and Dow Jones go up and down completely randomly.
Pair Corralation between Hydract AS and Dow Jones
Assuming the 90 days trading horizon Hydract AS is expected to generate 16.57 times more return on investment than Dow Jones. However, Hydract AS is 16.57 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 24.00 in Hydract AS on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Hydract AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hydract AS vs. Dow Jones Industrial
Performance |
| Timeline |
Hydract AS and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hydract AS
Pair trading matchups for Hydract AS
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hydract AS and Dow Jones
The main advantage of trading using opposite Hydract AS and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydract AS 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.| Hydract AS vs. Prime Office AS | Hydract AS vs. Lollands Bank | Hydract AS vs. Groenlandsbanken AS | Hydract AS vs. Fynske Bank AS |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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