Correlation Between Leocor Gold and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Leocor Gold 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 Leocor Gold and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leocor Gold and Dow Jones Industrial, you can compare the effects of market volatilities on Leocor Gold 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 Leocor Gold with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leocor Gold and Dow Jones.
Diversification Opportunities for Leocor Gold and Dow Jones
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leocor and Dow is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Leocor Gold 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 Leocor Gold 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 Leocor Gold 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 Leocor Gold i.e., Leocor Gold and Dow Jones go up and down completely randomly.
Pair Corralation between Leocor Gold and Dow Jones
Assuming the 90 days horizon Leocor Gold is expected to generate 9.26 times more return on investment than Dow Jones. However, Leocor Gold is 9.26 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of risk. If you would invest 6.78 in Leocor Gold on August 26, 2024 and sell it today you would earn a total of 2.12 from holding Leocor Gold or generate 31.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leocor Gold vs. Dow Jones Industrial
Performance |
| Timeline |
Leocor Gold and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Leocor Gold
Pair trading matchups for Leocor Gold
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Leocor Gold and Dow Jones
The main advantage of trading using opposite Leocor Gold and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leocor Gold 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.| Leocor Gold vs. Silver Wolf Exploration | Leocor Gold vs. Monumental Minerals Corp | Leocor Gold vs. Riverside Resources | Leocor Gold vs. Azucar Minerals |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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