Correlation Between Lobe Sciences and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Lobe Sciences 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 Lobe Sciences and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lobe Sciences and Dow Jones Industrial, you can compare the effects of market volatilities on Lobe Sciences 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 Lobe Sciences with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lobe Sciences and Dow Jones.
Diversification Opportunities for Lobe Sciences and Dow Jones
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lobe and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lobe Sciences 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 Lobe Sciences 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 Lobe Sciences 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 Lobe Sciences i.e., Lobe Sciences and Dow Jones go up and down completely randomly.
Pair Corralation between Lobe Sciences and Dow Jones
Assuming the 90 days horizon Lobe Sciences is expected to generate 262.89 times more return on investment than Dow Jones. However, Lobe Sciences is 262.89 times more volatile than Dow Jones Industrial. It trades about 0.19 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 3.19 in Lobe Sciences on August 29, 2024 and sell it today you would lose (2.14) from holding Lobe Sciences or give up 67.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lobe Sciences vs. Dow Jones Industrial
Performance |
| Timeline |
Lobe Sciences and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Lobe Sciences
Pair trading matchups for Lobe Sciences
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Lobe Sciences and Dow Jones
The main advantage of trading using opposite Lobe Sciences and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lobe Sciences 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.| Lobe Sciences vs. Green Cures Botanical | Lobe Sciences vs. Cann American Corp | Lobe Sciences vs. Rimrock Gold Corp | Lobe Sciences vs. Galexxy Holdings |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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