Correlation Between MAENDELEO BANK and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MAENDELEO BANK 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 MAENDELEO BANK and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAENDELEO BANK PLC and Dow Jones Industrial, you can compare the effects of market volatilities on MAENDELEO BANK 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 MAENDELEO BANK with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAENDELEO BANK and Dow Jones.
Diversification Opportunities for MAENDELEO BANK and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAENDELEO and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MAENDELEO BANK 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 MAENDELEO BANK 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 MAENDELEO BANK 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 MAENDELEO BANK i.e., MAENDELEO BANK and Dow Jones go up and down completely randomly.
Pair Corralation between MAENDELEO BANK and Dow Jones
Assuming the 90 days trading horizon MAENDELEO BANK PLC is expected to under-perform the Dow Jones. In addition to that, MAENDELEO BANK is 1.37 times more volatile than Dow Jones Industrial. It trades about -0.22 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of volatility. If you would invest 4,473,657 in Dow Jones Industrial on October 26, 2024 and sell it today you would lose (17,150) from holding Dow Jones Industrial or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
MAENDELEO BANK PLC vs. Dow Jones Industrial
Performance |
| Timeline |
MAENDELEO BANK and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MAENDELEO BANK PLC
Pair trading matchups for MAENDELEO BANK
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MAENDELEO BANK and Dow Jones
The main advantage of trading using opposite MAENDELEO BANK and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAENDELEO BANK 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.| MAENDELEO BANK vs. NATIONAL MICROFINANCE BANK | MAENDELEO BANK vs. KENYA MERCIAL BANK | MAENDELEO BANK vs. MWALIMU MERCIAL BANK | MAENDELEO BANK vs. MKOMBOZI MERCIAL BANK |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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