Correlation Between Catalyst/map Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Catalyst/map Global 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 Catalyst/map Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystmap Global Balanced and Dow Jones Industrial, you can compare the effects of market volatilities on Catalyst/map Global 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 Catalyst/map Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/map Global and Dow Jones.
Diversification Opportunities for Catalyst/map Global and Dow Jones
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalyst/map and Dow is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Balanced 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 Catalyst/map Global 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 Catalystmap Global Balanced 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 Catalyst/map Global i.e., Catalyst/map Global and Dow Jones go up and down completely randomly.
Pair Corralation between Catalyst/map Global and Dow Jones
Assuming the 90 days horizon Catalyst/map Global is expected to generate 21.77 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Catalystmap Global Balanced is 3.57 times less risky than Dow Jones. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. 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 | 100.0% |
| Values | Daily Returns |
Catalystmap Global Balanced vs. Dow Jones Industrial
Performance |
| Timeline |
Catalyst/map Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Catalystmap Global Balanced
Pair trading matchups for Catalyst/map Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Catalyst/map Global and Dow Jones
The main advantage of trading using opposite Catalyst/map Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/map Global 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.| Catalyst/map Global vs. Catalystsmh High Income | Catalyst/map Global vs. Catalystsmh High Income | Catalyst/map Global vs. Catalystsmh High Income | Catalyst/map Global vs. Catalyst Mlp Infrastructure |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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