Correlation Between NIIT and Dow Jones
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By analyzing existing cross correlation between NIIT Limited and Dow Jones Industrial, you can compare the effects of market volatilities on NIIT 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 NIIT with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIIT and Dow Jones.
Diversification Opportunities for NIIT and Dow Jones
Very poor diversification
The 3 months correlation between NIIT and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NIIT Limited 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 NIIT 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 NIIT Limited 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 NIIT i.e., NIIT and Dow Jones go up and down completely randomly.
Pair Corralation between NIIT and Dow Jones
Assuming the 90 days trading horizon NIIT Limited is expected to generate 4.8 times more return on investment than Dow Jones. However, NIIT is 4.8 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 11,138 in NIIT Limited on September 19, 2024 and sell it today you would earn a total of 8,972 from holding NIIT Limited or generate 80.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.93% |
| Values | Daily Returns |
NIIT Limited vs. Dow Jones Industrial
Performance |
| Timeline |
NIIT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
NIIT Limited
Pair trading matchups for NIIT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NIIT and Dow Jones
The main advantage of trading using opposite NIIT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIIT 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.| NIIT vs. Royal Orchid Hotels | NIIT vs. LT Technology Services | NIIT vs. The Indian Hotels | NIIT vs. Chalet Hotels Limited |
| Dow Jones vs. Mangazeya Mining | Dow Jones vs. Summit Materials | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. AMCON Distributing |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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