Correlation Between Libertine Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Libertine Holdings 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 Libertine Holdings and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libertine Holdings PLC and Dow Jones Industrial, you can compare the effects of market volatilities on Libertine Holdings 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 Libertine Holdings with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libertine Holdings and Dow Jones.
Diversification Opportunities for Libertine Holdings and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Libertine and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Libertine Holdings PLC 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 Libertine Holdings 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 Libertine Holdings PLC 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 Libertine Holdings i.e., Libertine Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between Libertine Holdings and Dow Jones
If you would invest 3,389,102 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,040,549 from holding Dow Jones Industrial or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Libertine Holdings PLC vs. Dow Jones Industrial
Performance |
| Timeline |
Libertine Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Libertine Holdings PLC
Pair trading matchups for Libertine Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Libertine Holdings and Dow Jones
The main advantage of trading using opposite Libertine Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libertine Holdings 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.| Libertine Holdings vs. Austevoll Seafood ASA | Libertine Holdings vs. Ebro Foods | Libertine Holdings vs. Alfa Financial Software | Libertine Holdings vs. Bell Food Group |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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