Correlation Between Multi Units and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Multi Units 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 Multi Units and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units Luxembourg and Dow Jones Industrial, you can compare the effects of market volatilities on Multi Units 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 Multi Units with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and Dow Jones.
Diversification Opportunities for Multi Units and Dow Jones
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Multi and Dow is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg 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 Multi Units 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 Multi Units Luxembourg 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 Multi Units i.e., Multi Units and Dow Jones go up and down completely randomly.
Pair Corralation between Multi Units and Dow Jones
Assuming the 90 days trading horizon Multi Units is expected to generate 1.36 times less return on investment than Dow Jones. In addition to that, Multi Units is 1.4 times more volatile than Dow Jones Industrial. It trades about 0.19 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 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 321,944 from holding Dow Jones Industrial or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Multi Units Luxembourg vs. Dow Jones Industrial
Performance |
| Timeline |
Multi Units and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Multi Units Luxembourg
Pair trading matchups for Multi Units
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Multi Units and Dow Jones
The main advantage of trading using opposite Multi Units and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units 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.| Multi Units vs. Multi Units Luxembourg | Multi Units vs. Multi Units Luxembourg | Multi Units vs. Multi Units France | Multi Units vs. Multi Units Luxembourg |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |