Correlation Between Perimeter Medical and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Perimeter Medical 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 Perimeter Medical and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perimeter Medical Imaging and Dow Jones Industrial, you can compare the effects of market volatilities on Perimeter Medical 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 Perimeter Medical with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Medical and Dow Jones.
Diversification Opportunities for Perimeter Medical and Dow Jones
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perimeter and Dow is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Medical Imaging 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 Perimeter Medical 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 Perimeter Medical Imaging 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 Perimeter Medical i.e., Perimeter Medical and Dow Jones go up and down completely randomly.
Pair Corralation between Perimeter Medical and Dow Jones
Assuming the 90 days trading horizon Perimeter Medical Imaging is expected to generate 6.52 times more return on investment than Dow Jones. However, Perimeter Medical is 6.52 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 0.34 per unit of risk. If you would invest 46.00 in Perimeter Medical Imaging on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Perimeter Medical Imaging or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Perimeter Medical Imaging vs. Dow Jones Industrial
Performance |
| Timeline |
Perimeter Medical and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Perimeter Medical Imaging
Pair trading matchups for Perimeter Medical
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Perimeter Medical and Dow Jones
The main advantage of trading using opposite Perimeter Medical and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Medical 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.| Perimeter Medical vs. Orca Energy Group | Perimeter Medical vs. Rogers Communications | Perimeter Medical vs. Aclara Resources | Perimeter Medical vs. Greenfire Resources |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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