Correlation Between Inpex Corp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Inpex Corp 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 Inpex Corp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inpex Corp ADR and Dow Jones Industrial, you can compare the effects of market volatilities on Inpex Corp 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 Inpex Corp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inpex Corp and Dow Jones.
Diversification Opportunities for Inpex Corp and Dow Jones
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inpex and Dow is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Inpex Corp ADR 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 Inpex Corp 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 Inpex Corp ADR 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 Inpex Corp i.e., Inpex Corp and Dow Jones go up and down completely randomly.
Pair Corralation between Inpex Corp and Dow Jones
Assuming the 90 days horizon Inpex Corp ADR is expected to generate 2.87 times more return on investment than Dow Jones. However, Inpex Corp is 2.87 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 979.00 in Inpex Corp ADR on August 30, 2024 and sell it today you would earn a total of 298.00 from holding Inpex Corp ADR or generate 30.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inpex Corp ADR vs. Dow Jones Industrial
Performance |
| Timeline |
Inpex Corp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Inpex Corp ADR
Pair trading matchups for Inpex Corp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Inpex Corp and Dow Jones
The main advantage of trading using opposite Inpex Corp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inpex Corp 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.| Inpex Corp vs. Permian Resources | Inpex Corp vs. Devon Energy | Inpex Corp vs. EOG Resources | Inpex Corp vs. Coterra Energy |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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