Correlation Between Trivago NV and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Trivago NV 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 Trivago NV and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trivago NV and Dow Jones Industrial, you can compare the effects of market volatilities on Trivago NV 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 Trivago NV with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trivago NV and Dow Jones.
Diversification Opportunities for Trivago NV and Dow Jones
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trivago and Dow is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Trivago NV 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 Trivago NV 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 Trivago NV 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 Trivago NV i.e., Trivago NV and Dow Jones go up and down completely randomly.
Pair Corralation between Trivago NV and Dow Jones
Given the investment horizon of 90 days Trivago NV is expected to generate 3.55 times more return on investment than Dow Jones. However, Trivago NV is 3.55 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 173.00 in Trivago NV on August 30, 2024 and sell it today you would earn a total of 45.00 from holding Trivago NV or generate 26.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trivago NV vs. Dow Jones Industrial
Performance |
| Timeline |
Trivago NV and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Trivago NV
Pair trading matchups for Trivago NV
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Trivago NV and Dow Jones
The main advantage of trading using opposite Trivago NV and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trivago NV 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.| Trivago NV vs. Upexi Inc | Trivago NV vs. Cheetah Mobile | Trivago NV vs. Comscore | Trivago NV vs. PropertyGuru Group |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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