Correlation Between Wilcon Depot and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Wilcon Depot 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 Wilcon Depot and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilcon Depot and Dow Jones Industrial, you can compare the effects of market volatilities on Wilcon Depot 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 Wilcon Depot with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilcon Depot and Dow Jones.
Diversification Opportunities for Wilcon Depot and Dow Jones
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wilcon and Dow is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wilcon Depot 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 Wilcon Depot 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 Wilcon Depot 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 Wilcon Depot i.e., Wilcon Depot and Dow Jones go up and down completely randomly.
Pair Corralation between Wilcon Depot and Dow Jones
Assuming the 90 days trading horizon Wilcon Depot is expected to under-perform the Dow Jones. In addition to that, Wilcon Depot is 2.3 times more volatile than Dow Jones Industrial. It trades about -0.42 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of volatility. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wilcon Depot vs. Dow Jones Industrial
Performance |
| Timeline |
Wilcon Depot and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Wilcon Depot
Pair trading matchups for Wilcon Depot
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Wilcon Depot and Dow Jones
The main advantage of trading using opposite Wilcon Depot and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilcon Depot 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.| Wilcon Depot vs. Asia United Bank | Wilcon Depot vs. Sun Life Financial | Wilcon Depot vs. Semirara Mining Corp | Wilcon Depot vs. BDO Unibank |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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