Correlation Between Prevas AB and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Prevas AB 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 Prevas AB and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prevas AB and Dow Jones Industrial, you can compare the effects of market volatilities on Prevas AB 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 Prevas AB with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prevas AB and Dow Jones.
Diversification Opportunities for Prevas AB and Dow Jones
Very good diversification
The 3 months correlation between Prevas and Dow is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Prevas AB 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 Prevas AB 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 Prevas AB 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 Prevas AB i.e., Prevas AB and Dow Jones go up and down completely randomly.
Pair Corralation between Prevas AB and Dow Jones
Assuming the 90 days trading horizon Prevas AB is expected to under-perform the Dow Jones. In addition to that, Prevas AB is 2.19 times more volatile than Dow Jones Industrial. It trades about -0.24 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of volatility. If you would invest 4,290,695 in Dow Jones Industrial on October 23, 2024 and sell it today you would earn a total of 111,886 from holding Dow Jones Industrial or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Prevas AB vs. Dow Jones Industrial
Performance |
| Timeline |
Prevas AB and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Prevas AB
Pair trading matchups for Prevas AB
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Prevas AB and Dow Jones
The main advantage of trading using opposite Prevas AB and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prevas AB 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.| Prevas AB vs. Softronic AB | Prevas AB vs. Novotek AB | Prevas AB vs. Svedbergs i Dalstorp | Prevas AB vs. Know IT AB |
| Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. NiSource | Dow Jones vs. Kinetik Holdings | Dow Jones vs. Empresa Distribuidora y |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |