Correlation Between Sparinvest USA and Dow Jones
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By analyzing existing cross correlation between Sparinvest USA Small and Dow Jones Industrial, you can compare the effects of market volatilities on Sparinvest USA 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 Sparinvest USA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparinvest USA and Dow Jones.
Diversification Opportunities for Sparinvest USA and Dow Jones
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sparinvest and Dow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sparinvest USA Small 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 Sparinvest USA 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 Sparinvest USA Small 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 Sparinvest USA i.e., Sparinvest USA and Dow Jones go up and down completely randomly.
Pair Corralation between Sparinvest USA and Dow Jones
Assuming the 90 days trading horizon Sparinvest USA Small is expected to generate 1.69 times more return on investment than Dow Jones. However, Sparinvest USA is 1.69 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.13 per unit of risk. If you would invest 10,625 in Sparinvest USA Small on August 25, 2024 and sell it today you would earn a total of 3,650 from holding Sparinvest USA Small or generate 34.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sparinvest USA Small vs. Dow Jones Industrial
Performance |
| Timeline |
Sparinvest USA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sparinvest USA Small
Pair trading matchups for Sparinvest USA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sparinvest USA and Dow Jones
The main advantage of trading using opposite Sparinvest USA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparinvest USA 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.| Sparinvest USA vs. Sparinvest Lange | Sparinvest USA vs. Sparinvest Europa Growth | Sparinvest USA vs. Sparinvest INDEX Europa | Sparinvest USA vs. Sparinvest INDEX Hj |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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