Correlation Between Voestalpine and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Voestalpine 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 Voestalpine and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voestalpine AG PK and Dow Jones Industrial, you can compare the effects of market volatilities on Voestalpine 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 Voestalpine with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voestalpine and Dow Jones.
Diversification Opportunities for Voestalpine and Dow Jones
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Voestalpine and Dow is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG PK 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 Voestalpine 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 Voestalpine AG PK 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 Voestalpine i.e., Voestalpine and Dow Jones go up and down completely randomly.
Pair Corralation between Voestalpine and Dow Jones
Assuming the 90 days horizon Voestalpine AG PK is expected to under-perform the Dow Jones. In addition to that, Voestalpine is 4.06 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 3,304,278 in Dow Jones Industrial on September 19, 2024 and sell it today you would earn a total of 1,040,712 from holding Dow Jones Industrial or generate 31.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voestalpine AG PK vs. Dow Jones Industrial
Performance |
| Timeline |
Voestalpine and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Voestalpine AG PK
Pair trading matchups for Voestalpine
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Voestalpine and Dow Jones
The main advantage of trading using opposite Voestalpine and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine 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.| Voestalpine vs. Gerdau SA ADR | Voestalpine vs. Usinas Siderurgicas de | Voestalpine vs. Ternium SA ADR | Voestalpine vs. POSCO Holdings |
| Dow Jones vs. Mangazeya Mining | Dow Jones vs. Summit Materials | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. AMCON Distributing |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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