Correlation Between Jde Peets and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Jde Peets 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 Jde Peets and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jde Peets Nv and Dow Jones Industrial, you can compare the effects of market volatilities on Jde Peets 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 Jde Peets with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jde Peets and Dow Jones.
Diversification Opportunities for Jde Peets and Dow Jones
Good diversification
The 3 months correlation between Jde and Dow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jde Peets Nv 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 Jde Peets 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 Jde Peets Nv 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 Jde Peets i.e., Jde Peets and Dow Jones go up and down completely randomly.
Pair Corralation between Jde Peets and Dow Jones
Assuming the 90 days trading horizon Jde Peets Nv is expected to generate 1.88 times more return on investment than Dow Jones. However, Jde Peets is 1.88 times more volatile than Dow Jones Industrial. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 1,652 in Jde Peets Nv on October 20, 2024 and sell it today you would earn a total of 89.00 from holding Jde Peets Nv or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Jde Peets Nv vs. Dow Jones Industrial
Performance |
| Timeline |
Jde Peets and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Jde Peets Nv
Pair trading matchups for Jde Peets
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Jde Peets and Dow Jones
The main advantage of trading using opposite Jde Peets and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jde Peets 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.| Jde Peets vs. Koninklijke Vopak NV | Jde Peets vs. Signify NV | Jde Peets vs. Koninklijke Ahold Delhaize | Jde Peets vs. NN Group NV |
| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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