Correlation Between Dow Jones and E Shopping
Can any of the company-specific risk be diversified away by investing in both Dow Jones and E Shopping 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 Dow Jones and E Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and E shopping Group SA, you can compare the effects of market volatilities on Dow Jones and E Shopping 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 E Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and E Shopping.
Diversification Opportunities for Dow Jones and E Shopping
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and ESG is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and E shopping Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E shopping Group 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 E Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E shopping Group has no effect on the direction of Dow Jones i.e., Dow Jones and E Shopping go up and down completely randomly.
Pair Corralation between Dow Jones and E Shopping
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.11 times more return on investment than E Shopping. However, Dow Jones Industrial is 9.41 times less risky than E Shopping. It trades about -0.21 of its potential returns per unit of risk. E shopping Group SA is currently generating about -0.07 per unit of risk. If you would invest 4,473,657 in Dow Jones Industrial on September 26, 2024 and sell it today you would lose (143,954) from holding Dow Jones Industrial or give up 3.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Dow Jones Industrial vs. E shopping Group SA
Performance |
Timeline |
Dow Jones and E Shopping Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
E shopping Group SA
Pair trading matchups for E Shopping
Pair Trading with Dow Jones and E Shopping
The main advantage of trading using opposite Dow Jones and E Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, E Shopping 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 E Shopping will offset losses from the drop in E Shopping's long position.Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
E Shopping vs. Banco Santander SA | E Shopping vs. UniCredit SpA | E Shopping vs. CEZ as | E Shopping vs. Polski Koncern Naftowy |
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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