Correlation Between Dow Jones and NBTM New
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By analyzing existing cross correlation between Dow Jones Industrial and NBTM New Materials, you can compare the effects of market volatilities on Dow Jones and NBTM New 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 Dow Jones with a short position of NBTM New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NBTM New.
Diversification Opportunities for Dow Jones and NBTM New
Average diversification
The 3 months correlation between Dow and NBTM is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NBTM New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBTM New Materials and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with NBTM New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBTM New Materials has no effect on the direction of Dow Jones i.e., Dow Jones and NBTM New go up and down completely randomly.
Pair Corralation between Dow Jones and NBTM New
Assuming the 90 days trading horizon Dow Jones is expected to generate 7.01 times less return on investment than NBTM New. But when comparing it to its historical volatility, Dow Jones Industrial is 4.38 times less risky than NBTM New. It trades about 0.06 of its potential returns per unit of risk. NBTM New Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,420 in NBTM New Materials on September 26, 2024 and sell it today you would earn a total of 229.00 from holding NBTM New Materials or generate 16.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 93.65% |
Values | Daily Returns |
Dow Jones Industrial vs. NBTM New Materials
Performance |
Timeline |
Dow Jones and NBTM New Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NBTM New Materials
Pair trading matchups for NBTM New
Pair Trading with Dow Jones and NBTM New
The main advantage of trading using opposite Dow Jones and NBTM New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, NBTM New 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 NBTM New will offset losses from the drop in NBTM New's long position.Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
NBTM New vs. Fujian Nanwang Environment | NBTM New vs. Shengda Mining Co | NBTM New vs. Eit Environmental Development | NBTM New vs. JCHX Mining Management |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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