Correlation Between Vuzix Corp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Vuzix Corp 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 Vuzix Corp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vuzix Corp Cmn and Dow Jones Industrial, you can compare the effects of market volatilities on Vuzix Corp 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 Vuzix Corp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vuzix Corp and Dow Jones.
Diversification Opportunities for Vuzix Corp and Dow Jones
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vuzix and Dow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Vuzix Corp Cmn 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 Vuzix Corp 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 Vuzix Corp Cmn 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 Vuzix Corp i.e., Vuzix Corp and Dow Jones go up and down completely randomly.
Pair Corralation between Vuzix Corp and Dow Jones
Given the investment horizon of 90 days Vuzix Corp Cmn is expected to generate 10.3 times more return on investment than Dow Jones. However, Vuzix Corp is 10.3 times more volatile than Dow Jones Industrial. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 130.00 in Vuzix Corp Cmn on August 27, 2024 and sell it today you would earn a total of 41.00 from holding Vuzix Corp Cmn or generate 31.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vuzix Corp Cmn vs. Dow Jones Industrial
Performance |
| Timeline |
Vuzix Corp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Vuzix Corp Cmn
Pair trading matchups for Vuzix Corp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Vuzix Corp and Dow Jones
The main advantage of trading using opposite Vuzix Corp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vuzix Corp 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.| Vuzix Corp vs. VOXX International | Vuzix Corp vs. LG Display Co | Vuzix Corp vs. Wearable Devices | Vuzix Corp vs. Universal Electronics |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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