Correlation Between Klckner Co and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Klckner Co 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 Klckner Co and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Dow Jones Industrial, you can compare the effects of market volatilities on Klckner Co 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 Klckner Co with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Dow Jones.
Diversification Opportunities for Klckner Co and Dow Jones
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Klckner and Dow is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE 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 Klckner Co 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 Klckner Co SE 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 Klckner Co i.e., Klckner Co and Dow Jones go up and down completely randomly.
Pair Corralation between Klckner Co and Dow Jones
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Dow Jones. In addition to that, Klckner Co is 2.88 times more volatile than Dow Jones Industrial. It trades about -0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 3,428,864 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 1,044,793 from holding Dow Jones Industrial or generate 30.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.61% |
| Values | Daily Returns |
Klckner Co SE vs. Dow Jones Industrial
Performance |
| Timeline |
Klckner Co and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Klckner Co SE
Pair trading matchups for Klckner Co
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Klckner Co and Dow Jones
The main advantage of trading using opposite Klckner Co and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co 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.| Klckner Co vs. Caseys General Stores | Klckner Co vs. SPARTAN STORES | Klckner Co vs. Treasury Wine Estates | Klckner Co vs. BJs Restaurants |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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