Correlation Between Vestum AB and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Vestum AB 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 Vestum AB and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestum AB and Dow Jones Industrial, you can compare the effects of market volatilities on Vestum AB 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 Vestum AB with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestum AB and Dow Jones.
Diversification Opportunities for Vestum AB and Dow Jones
Weak diversification
The 3 months correlation between Vestum and Dow is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vestum AB 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 Vestum AB 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 Vestum AB 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 Vestum AB i.e., Vestum AB and Dow Jones go up and down completely randomly.
Pair Corralation between Vestum AB and Dow Jones
Assuming the 90 days trading horizon Vestum AB is expected to generate 6.11 times more return on investment than Dow Jones. However, Vestum AB is 6.11 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 600.00 in Vestum AB on August 29, 2024 and sell it today you would earn a total of 418.00 from holding Vestum AB or generate 69.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.36% |
| Values | Daily Returns |
Vestum AB vs. Dow Jones Industrial
Performance |
| Timeline |
Vestum AB and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Vestum AB
Pair trading matchups for Vestum AB
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Vestum AB and Dow Jones
The main advantage of trading using opposite Vestum AB and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestum AB 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.| Vestum AB vs. Sweco AB | Vestum AB vs. AAK AB | Vestum AB vs. Beijer Ref AB | Vestum AB vs. Bravida Holding AB |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |