Correlation Between Expat Romania and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Expat Romania 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 Expat Romania and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expat Romania BET and Dow Jones Industrial, you can compare the effects of market volatilities on Expat Romania 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 Expat Romania with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expat Romania and Dow Jones.
Diversification Opportunities for Expat Romania and Dow Jones
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Expat and Dow is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Expat Romania BET 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 Expat Romania 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 Expat Romania BET 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 Expat Romania i.e., Expat Romania and Dow Jones go up and down completely randomly.
Pair Corralation between Expat Romania and Dow Jones
Assuming the 90 days trading horizon Expat Romania BET is expected to under-perform the Dow Jones. In addition to that, Expat Romania is 1.28 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Expat Romania BET vs. Dow Jones Industrial
Performance |
| Timeline |
Expat Romania and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Expat Romania BET
Pair trading matchups for Expat Romania
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Expat Romania and Dow Jones
The main advantage of trading using opposite Expat Romania and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expat Romania 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.| Expat Romania vs. UBS Fund Solutions | Expat Romania vs. Xtrackers II | Expat Romania vs. Xtrackers Nikkei 225 | Expat Romania vs. iShares VII PLC |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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