Correlation Between MEGA METAL and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MEGA METAL 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 MEGA METAL and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEGA METAL and Dow Jones Industrial, you can compare the effects of market volatilities on MEGA METAL 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 MEGA METAL with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and Dow Jones.
Diversification Opportunities for MEGA METAL and Dow Jones
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MEGA and Dow is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL 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 MEGA METAL 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 MEGA METAL 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 MEGA METAL i.e., MEGA METAL and Dow Jones go up and down completely randomly.
Pair Corralation between MEGA METAL and Dow Jones
Assuming the 90 days trading horizon MEGA METAL is expected to generate 6.21 times more return on investment than Dow Jones. However, MEGA METAL is 6.21 times more volatile than Dow Jones Industrial. It trades about 0.02 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 3,112 in MEGA METAL on August 28, 2024 and sell it today you would earn a total of 32.00 from holding MEGA METAL or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 47.58% |
| Values | Daily Returns |
MEGA METAL vs. Dow Jones Industrial
Performance |
| Timeline |
MEGA METAL and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MEGA METAL
Pair trading matchups for MEGA METAL
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MEGA METAL and Dow Jones
The main advantage of trading using opposite MEGA METAL and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL 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.| MEGA METAL vs. Turkish Airlines | MEGA METAL vs. Koc Holding AS | MEGA METAL vs. Ford Otomotiv Sanayi | MEGA METAL vs. Turkiye Petrol Rafinerileri |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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