Correlation Between Sparindex INDEX and Dow Jones
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By analyzing existing cross correlation between Sparindex INDEX OMX and Dow Jones Industrial, you can compare the effects of market volatilities on Sparindex INDEX 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 Sparindex INDEX with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparindex INDEX and Dow Jones.
Diversification Opportunities for Sparindex INDEX and Dow Jones
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparindex and Dow is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sparindex INDEX OMX 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 Sparindex INDEX 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 Sparindex INDEX OMX 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 Sparindex INDEX i.e., Sparindex INDEX and Dow Jones go up and down completely randomly.
Pair Corralation between Sparindex INDEX and Dow Jones
Assuming the 90 days trading horizon Sparindex INDEX OMX is expected to under-perform the Dow Jones. In addition to that, Sparindex INDEX is 1.11 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Sparindex INDEX OMX vs. Dow Jones Industrial
Performance |
| Timeline |
Sparindex INDEX and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sparindex INDEX OMX
Pair trading matchups for Sparindex INDEX
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sparindex INDEX and Dow Jones
The main advantage of trading using opposite Sparindex INDEX and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparindex INDEX 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.| Sparindex INDEX vs. Sparindex INDEX Stabile | Sparindex INDEX vs. Sparinvest Lange | Sparindex INDEX vs. Investeringsforeningen Danske Invest | Sparindex INDEX vs. Sparinv SICAV |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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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