Correlation Between Marquee Resources and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Marquee Resources 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 Marquee Resources and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marquee Resources and Dow Jones Industrial, you can compare the effects of market volatilities on Marquee Resources 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 Marquee Resources with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marquee Resources and Dow Jones.
Diversification Opportunities for Marquee Resources and Dow Jones
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marquee and Dow is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Marquee Resources 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 Marquee Resources 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 Marquee Resources 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 Marquee Resources i.e., Marquee Resources and Dow Jones go up and down completely randomly.
Pair Corralation between Marquee Resources and Dow Jones
Assuming the 90 days trading horizon Marquee Resources is expected to generate 138.34 times more return on investment than Dow Jones. However, Marquee Resources is 138.34 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 2.00 in Marquee Resources on August 27, 2024 and sell it today you would lose (0.50) from holding Marquee Resources or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.92% |
| Values | Daily Returns |
Marquee Resources vs. Dow Jones Industrial
Performance |
| Timeline |
Marquee Resources and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Marquee Resources
Pair trading matchups for Marquee Resources
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Marquee Resources and Dow Jones
The main advantage of trading using opposite Marquee Resources and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marquee Resources 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.| Marquee Resources vs. Northern Star Resources | Marquee Resources vs. Evolution Mining | Marquee Resources vs. Bluescope Steel | Marquee Resources vs. Sandfire Resources NL |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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