Correlation Between Dow Jones and LG Gerd
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By analyzing existing cross correlation between Dow Jones Industrial and LG Gerd Kommer, you can compare the effects of market volatilities on Dow Jones and LG Gerd 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 LG Gerd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and LG Gerd.
Diversification Opportunities for Dow Jones and LG Gerd
Very poor diversification
The 3 months correlation between Dow and GERD is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and LG Gerd Kommer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Gerd Kommer 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 LG Gerd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Gerd Kommer has no effect on the direction of Dow Jones i.e., Dow Jones and LG Gerd go up and down completely randomly.
Pair Corralation between Dow Jones and LG Gerd
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.62 times less return on investment than LG Gerd. In addition to that, Dow Jones is 1.18 times more volatile than LG Gerd Kommer. It trades about 0.06 of its total potential returns per unit of risk. LG Gerd Kommer is currently generating about 0.11 per unit of volatility. If you would invest 1,129 in LG Gerd Kommer on September 26, 2024 and sell it today you would earn a total of 52.00 from holding LG Gerd Kommer or generate 4.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Dow Jones Industrial vs. LG Gerd Kommer
Performance |
Timeline |
Dow Jones and LG Gerd Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
LG Gerd Kommer
Pair trading matchups for LG Gerd
Pair Trading with Dow Jones and LG Gerd
The main advantage of trading using opposite Dow Jones and LG Gerd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, LG Gerd 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 LG Gerd will offset losses from the drop in LG Gerd's long position.Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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