Correlation Between Just Eat and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Just Eat 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 Just Eat and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Just Eat Takeaway and Dow Jones Industrial, you can compare the effects of market volatilities on Just Eat 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 Just Eat with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Just Eat and Dow Jones.
Diversification Opportunities for Just Eat and Dow Jones
Good diversification
The 3 months correlation between Just and Dow is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Just Eat Takeaway 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 Just Eat 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 Just Eat Takeaway 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 Just Eat i.e., Just Eat and Dow Jones go up and down completely randomly.
Pair Corralation between Just Eat and Dow Jones
Assuming the 90 days trading horizon Just Eat Takeaway is expected to generate 4.36 times more return on investment than Dow Jones. However, Just Eat is 4.36 times more volatile than Dow Jones Industrial. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 1,127 in Just Eat Takeaway on August 27, 2024 and sell it today you would earn a total of 303.00 from holding Just Eat Takeaway or generate 26.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Just Eat Takeaway vs. Dow Jones Industrial
Performance |
| Timeline |
Just Eat and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Just Eat Takeaway
Pair trading matchups for Just Eat
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Just Eat and Dow Jones
The main advantage of trading using opposite Just Eat and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Just Eat 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.| Just Eat vs. Prosus NV | Just Eat vs. Koninklijke Ahold Delhaize | Just Eat vs. Adyen NV | Just Eat vs. ASML Holding NV |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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