Correlation Between Leeuwin Metals and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Leeuwin Metals 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 Leeuwin Metals and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leeuwin Metals and Dow Jones Industrial, you can compare the effects of market volatilities on Leeuwin Metals 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 Leeuwin Metals with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leeuwin Metals and Dow Jones.
Diversification Opportunities for Leeuwin Metals and Dow Jones
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leeuwin and Dow is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Leeuwin Metals 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 Leeuwin Metals 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 Leeuwin Metals 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 Leeuwin Metals i.e., Leeuwin Metals and Dow Jones go up and down completely randomly.
Pair Corralation between Leeuwin Metals and Dow Jones
Assuming the 90 days trading horizon Leeuwin Metals is expected to generate 9.24 times more return on investment than Dow Jones. However, Leeuwin Metals is 9.24 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 8.55 in Leeuwin Metals on November 3, 2024 and sell it today you would earn a total of 3.45 from holding Leeuwin Metals or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Leeuwin Metals vs. Dow Jones Industrial
Performance |
| Timeline |
Leeuwin Metals and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Leeuwin Metals
Pair trading matchups for Leeuwin Metals
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Leeuwin Metals and Dow Jones
The main advantage of trading using opposite Leeuwin Metals and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leeuwin Metals 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.| Leeuwin Metals vs. Australian Unity Office | Leeuwin Metals vs. Macquarie Technology Group | Leeuwin Metals vs. Clime Investment Management | Leeuwin Metals vs. Cleanaway Waste Management |
| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance |