Correlation Between Viafin Service and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Viafin Service 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 Viafin Service and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viafin Service Oyj and Dow Jones Industrial, you can compare the effects of market volatilities on Viafin Service 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 Viafin Service with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viafin Service and Dow Jones.
Diversification Opportunities for Viafin Service and Dow Jones
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Viafin and Dow is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Viafin Service Oyj 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 Viafin Service 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 Viafin Service Oyj 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 Viafin Service i.e., Viafin Service and Dow Jones go up and down completely randomly.
Pair Corralation between Viafin Service and Dow Jones
Assuming the 90 days trading horizon Viafin Service Oyj is expected to generate 1.66 times more return on investment than Dow Jones. However, Viafin Service is 1.66 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.22 per unit of risk. If you would invest 1,820 in Viafin Service Oyj on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Viafin Service Oyj or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viafin Service Oyj vs. Dow Jones Industrial
Performance |
| Timeline |
Viafin Service and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Viafin Service Oyj
Pair trading matchups for Viafin Service
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Viafin Service and Dow Jones
The main advantage of trading using opposite Viafin Service and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viafin Service 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.| Viafin Service vs. SSH Communications Security | Viafin Service vs. Nordea Bank Abp | Viafin Service vs. Alandsbanken Abp A | Viafin Service vs. Nightingale Health Oyj |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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