Correlation Between Manhattan Bridge and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Manhattan Bridge 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 Manhattan Bridge and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Bridge Capital and Dow Jones Industrial, you can compare the effects of market volatilities on Manhattan Bridge 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 Manhattan Bridge with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan Bridge and Dow Jones.
Diversification Opportunities for Manhattan Bridge and Dow Jones
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manhattan and Dow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Bridge Capital 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 Manhattan Bridge 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 Manhattan Bridge Capital 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 Manhattan Bridge i.e., Manhattan Bridge and Dow Jones go up and down completely randomly.
Pair Corralation between Manhattan Bridge and Dow Jones
Given the investment horizon of 90 days Manhattan Bridge Capital is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Manhattan Bridge Capital is 1.13 times less risky than Dow Jones. The stock trades about -0.27 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manhattan Bridge Capital vs. Dow Jones Industrial
Performance |
| Timeline |
Manhattan Bridge and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Manhattan Bridge Capital
Pair trading matchups for Manhattan Bridge
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Manhattan Bridge and Dow Jones
The main advantage of trading using opposite Manhattan Bridge and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Bridge 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.| Manhattan Bridge vs. Franklin BSP Realty | Manhattan Bridge vs. AGNC Investment Corp | Manhattan Bridge vs. Nexpoint Real Estate | Manhattan Bridge vs. Great Ajax Corp |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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