Correlation Between New Work and Dow Jones
Can any of the company-specific risk be diversified away by investing in both New Work 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 New Work and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Work SE and Dow Jones Industrial, you can compare the effects of market volatilities on New Work 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 New Work with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Work and Dow Jones.
Diversification Opportunities for New Work and Dow Jones
Very weak diversification
The 3 months correlation between New and Dow is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding New Work SE 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 New Work 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 New Work SE 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 New Work i.e., New Work and Dow Jones go up and down completely randomly.
Pair Corralation between New Work and Dow Jones
Assuming the 90 days trading horizon New Work SE is expected to generate 0.76 times more return on investment than Dow Jones. However, New Work SE is 1.32 times less risky than Dow Jones. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.14 per unit of risk. If you would invest 6,570 in New Work SE on September 19, 2024 and sell it today you would earn a total of 180.00 from holding New Work SE or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
New Work SE vs. Dow Jones Industrial
Performance |
| Timeline |
New Work and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
New Work SE
Pair trading matchups for New Work
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with New Work and Dow Jones
The main advantage of trading using opposite New Work and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Work 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.| New Work vs. CarsalesCom | New Work vs. ALERION CLEANPOWER | New Work vs. CVW CLEANTECH INC | New Work vs. CANON MARKETING JP |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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