Correlation Between Kering SA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kering SA 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 Kering SA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and Dow Jones Industrial, you can compare the effects of market volatilities on Kering SA 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 Kering SA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and Dow Jones.
Diversification Opportunities for Kering SA and Dow Jones
Very good diversification
The 3 months correlation between Kering and Dow is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kering 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 Kering SA 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 Kering 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 Kering SA i.e., Kering SA and Dow Jones go up and down completely randomly.
Pair Corralation between Kering SA and Dow Jones
Assuming the 90 days trading horizon Kering SA is expected to generate 4.98 times more return on investment than Dow Jones. However, Kering SA is 4.98 times more volatile than Dow Jones Industrial. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.02 per unit of risk. If you would invest 22,400 in Kering SA on September 12, 2024 and sell it today you would earn a total of 1,795 from holding Kering SA or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kering SA vs. Dow Jones Industrial
Performance |
| Timeline |
Kering SA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kering SA
Pair trading matchups for Kering SA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kering SA and Dow Jones
The main advantage of trading using opposite Kering SA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA 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.| Kering SA vs. MCEWEN MINING INC | Kering SA vs. NAKED WINES PLC | Kering SA vs. Harmony Gold Mining | Kering SA vs. CHINA TONTINE WINES |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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