Correlation Between Munters Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Munters Group 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 Munters Group and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Munters Group AB and Dow Jones Industrial, you can compare the effects of market volatilities on Munters Group 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 Munters Group with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Munters Group and Dow Jones.
Diversification Opportunities for Munters Group and Dow Jones
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Munters and Dow is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Munters Group AB 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 Munters Group 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 Munters Group AB 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 Munters Group i.e., Munters Group and Dow Jones go up and down completely randomly.
Pair Corralation between Munters Group and Dow Jones
Assuming the 90 days trading horizon Munters Group AB is expected to under-perform the Dow Jones. In addition to that, Munters Group is 3.29 times more volatile than Dow Jones Industrial. It trades about -0.12 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Munters Group AB vs. Dow Jones Industrial
Performance |
| Timeline |
Munters Group and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Munters Group AB
Pair trading matchups for Munters Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Munters Group and Dow Jones
The main advantage of trading using opposite Munters Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munters Group 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.| Munters Group vs. Lindab International AB | Munters Group vs. Nolato AB | Munters Group vs. Trelleborg AB | Munters Group vs. BillerudKorsnas AB |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |