Correlation Between Kraft Bank and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kraft Bank 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 Kraft Bank and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Bank Asa and Dow Jones Industrial, you can compare the effects of market volatilities on Kraft Bank 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 Kraft Bank with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Bank and Dow Jones.
Diversification Opportunities for Kraft Bank and Dow Jones
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kraft and Dow is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Bank Asa 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 Kraft Bank 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 Kraft Bank Asa 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 Kraft Bank i.e., Kraft Bank and Dow Jones go up and down completely randomly.
Pair Corralation between Kraft Bank and Dow Jones
Assuming the 90 days trading horizon Kraft Bank Asa is expected to generate 2.44 times more return on investment than Dow Jones. However, Kraft Bank is 2.44 times more volatile than Dow Jones Industrial. It trades about -0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.15 per unit of risk. If you would invest 880.00 in Kraft Bank Asa on December 24, 2024 and sell it today you would lose (10.00) from holding Kraft Bank Asa or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Bank Asa vs. Dow Jones Industrial
Performance |
| Timeline |
Kraft Bank and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kraft Bank Asa
Pair trading matchups for Kraft Bank
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kraft Bank and Dow Jones
The main advantage of trading using opposite Kraft Bank and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Bank 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.| Kraft Bank vs. Jaeren Sparebank | Kraft Bank vs. Morrow Bank ASA | Kraft Bank vs. Odfjell Technology | Kraft Bank vs. River Tech plc |
| Dow Jones vs. Tyson Foods | Dow Jones vs. Smithfield Foods, Common | Dow Jones vs. Academy Sports Outdoors | Dow Jones vs. Paranovus Entertainment Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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