Correlation Between Investin Optimal and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Investin Optimal 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 Investin Optimal and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investin Optimal Stabil and Dow Jones Industrial, you can compare the effects of market volatilities on Investin Optimal 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 Investin Optimal with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investin Optimal and Dow Jones.
Diversification Opportunities for Investin Optimal and Dow Jones
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investin and Dow is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Investin Optimal Stabil 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 Investin Optimal 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 Investin Optimal Stabil 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 Investin Optimal i.e., Investin Optimal and Dow Jones go up and down completely randomly.
Pair Corralation between Investin Optimal and Dow Jones
Assuming the 90 days trading horizon Investin Optimal Stabil is expected to generate 0.31 times more return on investment than Dow Jones. However, Investin Optimal Stabil is 3.22 times less risky than Dow Jones. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.04 per unit of risk. If you would invest 14,706 in Investin Optimal Stabil on November 6, 2024 and sell it today you would earn a total of 332.00 from holding Investin Optimal Stabil or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Investin Optimal Stabil vs. Dow Jones Industrial
Performance |
| Timeline |
Investin Optimal and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Investin Optimal Stabil
Pair trading matchups for Investin Optimal
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Investin Optimal and Dow Jones
The main advantage of trading using opposite Investin Optimal and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investin Optimal 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.| Investin Optimal vs. Hvidbjerg Bank | Investin Optimal vs. Sydbank AS | Investin Optimal vs. PARKEN Sport Entertainment | Investin Optimal vs. Groenlandsbanken AS |
| Dow Jones vs. Mako Mining Corp | Dow Jones vs. Reyna Silver Corp | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Trupanion |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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