Correlation Between Dow Jones and BOE Technology
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By analyzing existing cross correlation between Dow Jones Industrial and BOE Technology Group, you can compare the effects of market volatilities on Dow Jones and BOE Technology 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 BOE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BOE Technology.
Diversification Opportunities for Dow Jones and BOE Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and BOE is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology 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 BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of Dow Jones i.e., Dow Jones and BOE Technology go up and down completely randomly.
Pair Corralation between Dow Jones and BOE Technology
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the BOE Technology. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.36 times less risky than BOE Technology. The index trades about -0.21 of its potential returns per unit of risk. The BOE Technology Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 420.00 in BOE Technology Group on September 26, 2024 and sell it today you would earn a total of 20.00 from holding BOE Technology Group or generate 4.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Dow Jones Industrial vs. BOE Technology Group
Performance |
Timeline |
Dow Jones and BOE Technology Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BOE Technology Group
Pair trading matchups for BOE Technology
Pair Trading with Dow Jones and BOE Technology
The main advantage of trading using opposite Dow Jones and BOE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BOE Technology 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 BOE Technology will offset losses from the drop in BOE Technology's long position.Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
BOE Technology vs. Industrial and Commercial | BOE Technology vs. China Construction Bank | BOE Technology vs. Agricultural Bank of | BOE Technology vs. Bank of China |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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