Correlation Between DOMTAR and Dow Jones
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By analyzing existing cross correlation between DOMTAR P 675 and Dow Jones Industrial, you can compare the effects of market volatilities on DOMTAR 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 DOMTAR with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOMTAR and Dow Jones.
Diversification Opportunities for DOMTAR and Dow Jones
Significant diversification
The 3 months correlation between DOMTAR and Dow is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding DOMTAR P 675 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 DOMTAR 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 DOMTAR P 675 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 DOMTAR i.e., DOMTAR and Dow Jones go up and down completely randomly.
Pair Corralation between DOMTAR and Dow Jones
Assuming the 90 days trading horizon DOMTAR is expected to generate 7.46 times less return on investment than Dow Jones. In addition to that, DOMTAR is 4.54 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,871,129 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 619,936 from holding Dow Jones Industrial or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
DOMTAR P 675 vs. Dow Jones Industrial
Performance |
| Timeline |
DOMTAR and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
DOMTAR P 675
Pair trading matchups for DOMTAR
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with DOMTAR and Dow Jones
The main advantage of trading using opposite DOMTAR and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOMTAR 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.| DOMTAR vs. Supercom | DOMTAR vs. Microbot Medical | DOMTAR vs. Merit Medical Systems | DOMTAR vs. Aquestive Therapeutics |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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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