Correlation Between Wacker Neuson and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Wacker Neuson 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 Wacker Neuson and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wacker Neuson SE and Dow Jones Industrial, you can compare the effects of market volatilities on Wacker Neuson 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 Wacker Neuson with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wacker Neuson and Dow Jones.
Diversification Opportunities for Wacker Neuson and Dow Jones
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wacker and Dow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Wacker Neuson SE 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 Wacker Neuson 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 Wacker Neuson SE 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 Wacker Neuson i.e., Wacker Neuson and Dow Jones go up and down completely randomly.
Pair Corralation between Wacker Neuson and Dow Jones
Assuming the 90 days trading horizon Wacker Neuson SE is expected to generate 3.77 times more return on investment than Dow Jones. However, Wacker Neuson is 3.77 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 1,418 in Wacker Neuson SE on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Wacker Neuson SE or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Wacker Neuson SE vs. Dow Jones Industrial
Performance |
| Timeline |
Wacker Neuson and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Wacker Neuson SE
Pair trading matchups for Wacker Neuson
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Wacker Neuson and Dow Jones
The main advantage of trading using opposite Wacker Neuson and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wacker Neuson 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.| Wacker Neuson vs. Corporate Office Properties | Wacker Neuson vs. LGI Homes | Wacker Neuson vs. DFS Furniture PLC | Wacker Neuson vs. Western Copper and |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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