Correlation Between Value Exchange and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Value Exchange 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 Value Exchange and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Exchange International and Dow Jones Industrial, you can compare the effects of market volatilities on Value Exchange 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 Value Exchange with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Exchange and Dow Jones.
Diversification Opportunities for Value Exchange and Dow Jones
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Value and Dow is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Value Exchange International 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 Value Exchange 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 Value Exchange International 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 Value Exchange i.e., Value Exchange and Dow Jones go up and down completely randomly.
Pair Corralation between Value Exchange and Dow Jones
Given the investment horizon of 90 days Value Exchange International is expected to generate 92.37 times more return on investment than Dow Jones. However, Value Exchange is 92.37 times more volatile than Dow Jones Industrial. It trades about 0.26 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of risk. If you would invest 2.20 in Value Exchange International on September 2, 2024 and sell it today you would earn a total of 3.80 from holding Value Exchange International or generate 172.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Exchange International vs. Dow Jones Industrial
Performance |
| Timeline |
Value Exchange and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Value Exchange International
Pair trading matchups for Value Exchange
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Value Exchange and Dow Jones
The main advantage of trading using opposite Value Exchange and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Exchange 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.| Value Exchange vs. Appen Limited | Value Exchange vs. Appen Limited | Value Exchange vs. Deveron Corp | Value Exchange vs. Direct Communication Solutions |
| 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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