Correlation Between MamaMancinis Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MamaMancinis Holdings 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 MamaMancinis Holdings and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MamaMancinis Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on MamaMancinis Holdings 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 MamaMancinis Holdings with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MamaMancinis Holdings and Dow Jones.
Diversification Opportunities for MamaMancinis Holdings and Dow Jones
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MamaMancinis and Dow is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MamaMancinis Holdings 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 MamaMancinis Holdings 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 MamaMancinis Holdings 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 MamaMancinis Holdings i.e., MamaMancinis Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between MamaMancinis Holdings and Dow Jones
If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 4.55% |
Values | Daily Returns |
MamaMancinis Holdings vs. Dow Jones Industrial
Performance |
Timeline |
MamaMancinis Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
MamaMancinis Holdings
Pair trading matchups for MamaMancinis Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MamaMancinis Holdings and Dow Jones
The main advantage of trading using opposite MamaMancinis Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MamaMancinis Holdings 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.MamaMancinis Holdings vs. Seneca Foods Corp | MamaMancinis Holdings vs. Central Garden Pet | MamaMancinis Holdings vs. Central Garden Pet | MamaMancinis Holdings vs. Natures Sunshine Products |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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