Correlation Between LOral SA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both LOral SA 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 LOral SA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOral SA and Dow Jones Industrial, you can compare the effects of market volatilities on LOral SA 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 LOral SA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOral SA and Dow Jones.
Diversification Opportunities for LOral SA and Dow Jones
Excellent diversification
The 3 months correlation between LOral and Dow is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding LOral SA 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 LOral SA 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 LOral SA 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 LOral SA i.e., LOral SA and Dow Jones go up and down completely randomly.
Pair Corralation between LOral SA and Dow Jones
Assuming the 90 days horizon LOral SA is expected to under-perform the Dow Jones. In addition to that, LOral SA is 1.86 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,838,609 in Dow Jones Industrial on September 24, 2024 and sell it today you would earn a total of 445,417 from holding Dow Jones Industrial or generate 11.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.65% |
Values | Daily Returns |
LOral SA vs. Dow Jones Industrial
Performance |
Timeline |
LOral SA and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
LOral SA
Pair trading matchups for LOral SA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with LOral SA and Dow Jones
The main advantage of trading using opposite LOral SA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOral SA 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.LOral SA vs. The Procter Gamble | LOral SA vs. LOREAL ADR 15EO | LOral SA vs. LOral SA | LOral SA vs. Unilever Plc |
Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |