Correlation Between Midnight Sun and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Midnight Sun 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 Midnight Sun and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midnight Sun Mining and Dow Jones Industrial, you can compare the effects of market volatilities on Midnight Sun 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 Midnight Sun with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midnight Sun and Dow Jones.
Diversification Opportunities for Midnight Sun and Dow Jones
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Midnight and Dow is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Midnight Sun Mining 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 Midnight Sun 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 Midnight Sun Mining 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 Midnight Sun i.e., Midnight Sun and Dow Jones go up and down completely randomly.
Pair Corralation between Midnight Sun and Dow Jones
Assuming the 90 days horizon Midnight Sun Mining is expected to generate 6.61 times more return on investment than Dow Jones. However, Midnight Sun is 6.61 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 30.00 in Midnight Sun Mining on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Midnight Sun Mining or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Midnight Sun Mining vs. Dow Jones Industrial
Performance |
| Timeline |
Midnight Sun and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Midnight Sun Mining
Pair trading matchups for Midnight Sun
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Midnight Sun and Dow Jones
The main advantage of trading using opposite Midnight Sun and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midnight Sun 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.| Midnight Sun vs. New Destiny Mining | Midnight Sun vs. Magnum Goldcorp | Midnight Sun vs. Asiabasemetals | Midnight Sun vs. Lupaka Gold Corp |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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