Correlation Between NGK Spark and Dow Jones
Can any of the company-specific risk be diversified away by investing in both NGK Spark 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 NGK Spark and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGK Spark Plug and Dow Jones Industrial, you can compare the effects of market volatilities on NGK Spark 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 NGK Spark with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGK Spark and Dow Jones.
Diversification Opportunities for NGK Spark and Dow Jones
Weak diversification
The 3 months correlation between NGK and Dow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NGK Spark Plug 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 NGK Spark 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 NGK Spark Plug 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 NGK Spark i.e., NGK Spark and Dow Jones go up and down completely randomly.
Pair Corralation between NGK Spark and Dow Jones
If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
NGK Spark Plug vs. Dow Jones Industrial
Performance |
| Timeline |
NGK Spark and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
NGK Spark Plug
Pair trading matchups for NGK Spark
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NGK Spark and Dow Jones
The main advantage of trading using opposite NGK Spark and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGK Spark 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.| NGK Spark vs. DENSO | NGK Spark vs. Bridgestone Corp ADR | NGK Spark vs. American Axle Manufacturing | NGK Spark vs. Dana Inc |
| 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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