Correlation Between VITA 34 and Dow Jones
Can any of the company-specific risk be diversified away by investing in both VITA 34 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 VITA 34 and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VITA 34 AG and Dow Jones Industrial, you can compare the effects of market volatilities on VITA 34 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 VITA 34 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITA 34 and Dow Jones.
Diversification Opportunities for VITA 34 and Dow Jones
Excellent diversification
The 3 months correlation between VITA and Dow is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding VITA 34 AG 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 VITA 34 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 VITA 34 AG 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 VITA 34 i.e., VITA 34 and Dow Jones go up and down completely randomly.
Pair Corralation between VITA 34 and Dow Jones
Assuming the 90 days trading horizon VITA 34 AG is expected to under-perform the Dow Jones. In addition to that, VITA 34 is 2.34 times more volatile than Dow Jones Industrial. It trades about -0.11 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of volatility. If you would invest 4,093,693 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 397,372 from holding Dow Jones Industrial or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
VITA 34 AG vs. Dow Jones Industrial
Performance |
| Timeline |
VITA 34 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
VITA 34 AG
Pair trading matchups for VITA 34
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with VITA 34 and Dow Jones
The main advantage of trading using opposite VITA 34 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITA 34 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.| VITA 34 vs. International Consolidated Airlines | VITA 34 vs. AEGEAN AIRLINES | VITA 34 vs. Aegean Airlines SA | VITA 34 vs. MagnaChip Semiconductor Corp |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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