Correlation Between ITTEFAQ Iron and Dow Jones
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By analyzing existing cross correlation between ITTEFAQ Iron Industries and Dow Jones Industrial, you can compare the effects of market volatilities on ITTEFAQ Iron 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 ITTEFAQ Iron with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITTEFAQ Iron and Dow Jones.
Diversification Opportunities for ITTEFAQ Iron and Dow Jones
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITTEFAQ and Dow is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ITTEFAQ Iron Industries 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 ITTEFAQ Iron 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 ITTEFAQ Iron Industries 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 ITTEFAQ Iron i.e., ITTEFAQ Iron and Dow Jones go up and down completely randomly.
Pair Corralation between ITTEFAQ Iron and Dow Jones
Assuming the 90 days trading horizon ITTEFAQ Iron is expected to generate 3.09 times less return on investment than Dow Jones. In addition to that, ITTEFAQ Iron is 3.84 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 3,899,639 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 530,012 from holding Dow Jones Industrial or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.74% |
| Values | Daily Returns |
ITTEFAQ Iron Industries vs. Dow Jones Industrial
Performance |
| Timeline |
ITTEFAQ Iron and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ITTEFAQ Iron Industries
Pair trading matchups for ITTEFAQ Iron
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ITTEFAQ Iron and Dow Jones
The main advantage of trading using opposite ITTEFAQ Iron and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITTEFAQ Iron 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.| ITTEFAQ Iron vs. Oil and Gas | ITTEFAQ Iron vs. Pakistan State Oil | ITTEFAQ Iron vs. Pakistan Petroleum | ITTEFAQ Iron vs. Engro |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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