Correlation Between WonderFi Technologies and Dow Jones
Can any of the company-specific risk be diversified away by investing in both WonderFi Technologies 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 WonderFi Technologies and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WonderFi Technologies and Dow Jones Industrial, you can compare the effects of market volatilities on WonderFi Technologies 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 WonderFi Technologies with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of WonderFi Technologies and Dow Jones.
Diversification Opportunities for WonderFi Technologies and Dow Jones
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WonderFi and Dow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WonderFi Technologies 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 WonderFi Technologies 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 WonderFi Technologies 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 WonderFi Technologies i.e., WonderFi Technologies and Dow Jones go up and down completely randomly.
Pair Corralation between WonderFi Technologies and Dow Jones
Assuming the 90 days horizon WonderFi Technologies is expected to generate 7.47 times more return on investment than Dow Jones. However, WonderFi Technologies is 7.47 times more volatile than Dow Jones Industrial. It trades about 0.27 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of risk. If you would invest 12.00 in WonderFi Technologies on September 2, 2024 and sell it today you would earn a total of 5.00 from holding WonderFi Technologies or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WonderFi Technologies vs. Dow Jones Industrial
Performance |
| Timeline |
WonderFi Technologies and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
WonderFi Technologies
Pair trading matchups for WonderFi Technologies
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with WonderFi Technologies and Dow Jones
The main advantage of trading using opposite WonderFi Technologies and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WonderFi Technologies 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.| WonderFi Technologies vs. Waldencast Acquisition Corp | WonderFi Technologies vs. Alkami Technology | WonderFi Technologies vs. ADEIA P | WonderFi Technologies vs. Paycor HCM |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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