Correlation Between Middlefield Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Middlefield Global 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 Middlefield Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Global Real and Dow Jones Industrial, you can compare the effects of market volatilities on Middlefield Global 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 Middlefield Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Global and Dow Jones.
Diversification Opportunities for Middlefield Global and Dow Jones
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Middlefield and Dow is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Global Real 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 Middlefield Global 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 Middlefield Global Real 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 Middlefield Global i.e., Middlefield Global and Dow Jones go up and down completely randomly.
Pair Corralation between Middlefield Global and Dow Jones
Assuming the 90 days trading horizon Middlefield Global Real is expected to generate 0.94 times more return on investment than Dow Jones. However, Middlefield Global Real is 1.06 times less risky than Dow Jones. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 695.00 in Middlefield Global Real on August 30, 2024 and sell it today you would earn a total of 86.00 from holding Middlefield Global Real or generate 12.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.57% |
| Values | Daily Returns |
Middlefield Global Real vs. Dow Jones Industrial
Performance |
| Timeline |
Middlefield Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Middlefield Global Real
Pair trading matchups for Middlefield Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Middlefield Global and Dow Jones
The main advantage of trading using opposite Middlefield Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Global 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.| Middlefield Global vs. BMO Concentrated Global | Middlefield Global vs. Capital Group Global | Middlefield Global vs. CI Global Alpha | Middlefield Global vs. Manulife Global Equity |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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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