Correlation Between Mena Transport and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mena Transport 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 Mena Transport and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and Dow Jones Industrial, you can compare the effects of market volatilities on Mena Transport 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 Mena Transport with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and Dow Jones.
Diversification Opportunities for Mena Transport and Dow Jones
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mena and Dow is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public 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 Mena Transport 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 Mena Transport Public 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 Mena Transport i.e., Mena Transport and Dow Jones go up and down completely randomly.
Pair Corralation between Mena Transport and Dow Jones
Assuming the 90 days trading horizon Mena Transport is expected to generate 2.59 times less return on investment than Dow Jones. In addition to that, Mena Transport is 2.48 times more volatile than Dow Jones Industrial. It trades about 0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of volatility. 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 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mena Transport Public vs. Dow Jones Industrial
Performance |
| Timeline |
Mena Transport and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mena Transport Public
Pair trading matchups for Mena Transport
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mena Transport and Dow Jones
The main advantage of trading using opposite Mena Transport and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport 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.| Mena Transport vs. Namyong Terminal PCL | Mena Transport vs. Hwa Fong Rubber | Mena Transport vs. Jay Mart Public | Mena Transport vs. IRPC Public |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |