Correlation Between Performance Technologies and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Performance Technologies 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 Performance Technologies and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Technologies SA and Dow Jones Industrial, you can compare the effects of market volatilities on Performance Technologies 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 Performance Technologies with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Technologies and Dow Jones.
Diversification Opportunities for Performance Technologies and Dow Jones
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and Dow is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Performance Technologies SA 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 Performance Technologies 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 Performance Technologies SA 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 Performance Technologies i.e., Performance Technologies and Dow Jones go up and down completely randomly.
Pair Corralation between Performance Technologies and Dow Jones
Assuming the 90 days trading horizon Performance Technologies SA is expected to generate 2.97 times more return on investment than Dow Jones. However, Performance Technologies is 2.97 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 389.00 in Performance Technologies SA on November 9, 2024 and sell it today you would earn a total of 140.00 from holding Performance Technologies SA or generate 35.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.58% |
| Values | Daily Returns |
Performance Technologies SA vs. Dow Jones Industrial
Performance |
| Timeline |
Performance Technologies and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Performance Technologies SA
Pair trading matchups for Performance Technologies
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Performance Technologies and Dow Jones
The main advantage of trading using opposite Performance Technologies and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Technologies 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.| Performance Technologies vs. Profile Systems Software | Performance Technologies vs. Optima bank SA | Performance Technologies vs. CPI Computer Peripherals | Performance Technologies vs. National Bank of |
| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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