Correlation Between Mauch Chunk and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mauch Chunk 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 Mauch Chunk and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauch Chunk Trust and Dow Jones Industrial, you can compare the effects of market volatilities on Mauch Chunk 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 Mauch Chunk with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauch Chunk and Dow Jones.
Diversification Opportunities for Mauch Chunk and Dow Jones
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mauch and Dow is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mauch Chunk Trust 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 Mauch Chunk 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 Mauch Chunk Trust 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 Mauch Chunk i.e., Mauch Chunk and Dow Jones go up and down completely randomly.
Pair Corralation between Mauch Chunk and Dow Jones
Given the investment horizon of 90 days Mauch Chunk Trust is expected to generate 1.81 times more return on investment than Dow Jones. However, Mauch Chunk is 1.81 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of risk. If you would invest 650.00 in Mauch Chunk Trust on August 26, 2024 and sell it today you would earn a total of 40.00 from holding Mauch Chunk Trust or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mauch Chunk Trust vs. Dow Jones Industrial
Performance |
| Timeline |
Mauch Chunk and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mauch Chunk Trust
Pair trading matchups for Mauch Chunk
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mauch Chunk and Dow Jones
The main advantage of trading using opposite Mauch Chunk and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauch Chunk 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.| Mauch Chunk vs. Western Alliance Bancorporation | Mauch Chunk vs. Zions Bancorporation | Mauch Chunk vs. KeyCorp | Mauch Chunk vs. First Horizon National |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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