Correlation Between SPECTRAL MEDICAL and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SPECTRAL 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 SPECTRAL 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 SPECTRAL MEDICAL and Dow Jones Industrial, you can compare the effects of market volatilities on SPECTRAL 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 SPECTRAL MEDICAL with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPECTRAL MEDICAL and Dow Jones.
Diversification Opportunities for SPECTRAL MEDICAL and Dow Jones
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPECTRAL and Dow is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL 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 SPECTRAL 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 SPECTRAL MEDICAL 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 SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and Dow Jones go up and down completely randomly.
Pair Corralation between SPECTRAL MEDICAL and Dow Jones
Assuming the 90 days horizon SPECTRAL MEDICAL is expected to generate 4.7 times more return on investment than Dow Jones. However, SPECTRAL MEDICAL is 4.7 times more volatile than Dow Jones Industrial. It trades about 0.26 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.21 per unit of risk. If you would invest 32.00 in SPECTRAL MEDICAL on October 12, 2024 and sell it today you would earn a total of 5.00 from holding SPECTRAL MEDICAL or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
SPECTRAL MEDICAL vs. Dow Jones Industrial
Performance |
| Timeline |
SPECTRAL MEDICAL and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SPECTRAL MEDICAL
Pair trading matchups for SPECTRAL MEDICAL
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SPECTRAL MEDICAL and Dow Jones
The main advantage of trading using opposite SPECTRAL MEDICAL and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPECTRAL 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.| SPECTRAL MEDICAL vs. Thermo Fisher Scientific | SPECTRAL MEDICAL vs. Danaher | SPECTRAL MEDICAL vs. Siemens Healthineers AG | SPECTRAL MEDICAL vs. Agilent Technologies |
| Dow Jones vs. Toro | Dow Jones vs. Foot Locker | Dow Jones vs. Abercrombie Fitch | Dow Jones vs. 51Talk Online Education |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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