Correlation Between Leatec Fine and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Leatec Fine 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 Leatec Fine and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and Dow Jones Industrial, you can compare the effects of market volatilities on Leatec Fine 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 Leatec Fine with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Dow Jones.
Diversification Opportunities for Leatec Fine and Dow Jones
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leatec and Dow is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics 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 Leatec Fine 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 Leatec Fine Ceramics 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 Leatec Fine i.e., Leatec Fine and Dow Jones go up and down completely randomly.
Pair Corralation between Leatec Fine and Dow Jones
Assuming the 90 days trading horizon Leatec Fine Ceramics is expected to generate 3.61 times more return on investment than Dow Jones. However, Leatec Fine is 3.61 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 2,430 in Leatec Fine Ceramics on September 5, 2024 and sell it today you would earn a total of 450.00 from holding Leatec Fine Ceramics or generate 18.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 90.63% |
Values | Daily Returns |
Leatec Fine Ceramics vs. Dow Jones Industrial
Performance |
Timeline |
Leatec Fine and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Leatec Fine Ceramics
Pair trading matchups for Leatec Fine
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Leatec Fine and Dow Jones
The main advantage of trading using opposite Leatec Fine and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine 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.Leatec Fine vs. TWOWAY Communications | Leatec Fine vs. Pontex Polyblend CoLtd | Leatec Fine vs. CHINA DEVELOPMENT FINANCIAL | Leatec Fine vs. China Mobile |
Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |