Correlation Between Vantage Towers and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Vantage Towers 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 Vantage Towers and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vantage Towers AG and Dow Jones Industrial, you can compare the effects of market volatilities on Vantage Towers 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 Vantage Towers with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vantage Towers and Dow Jones.
Diversification Opportunities for Vantage Towers and Dow Jones
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vantage and Dow is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vantage Towers 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 Vantage Towers 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 Vantage Towers 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 Vantage Towers i.e., Vantage Towers and Dow Jones go up and down completely randomly.
Pair Corralation between Vantage Towers and Dow Jones
Assuming the 90 days horizon Vantage Towers is expected to generate 1.06 times less return on investment than Dow Jones. In addition to that, Vantage Towers is 1.23 times more volatile than Dow Jones Industrial. It trades about 0.09 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 3,446,369 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 978,414 from holding Dow Jones Industrial or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vantage Towers AG vs. Dow Jones Industrial
Performance |
| Timeline |
Vantage Towers and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Vantage Towers AG
Pair trading matchups for Vantage Towers
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Vantage Towers and Dow Jones
The main advantage of trading using opposite Vantage Towers and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vantage Towers 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.| Vantage Towers vs. Redfin Corp | Vantage Towers vs. Offerpad Solutions | Vantage Towers vs. eXp World Holdings | Vantage Towers vs. Ohmyhome Limited Ordinary |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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