Correlation Between Dow Jones and Bonava AB
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By analyzing existing cross correlation between Dow Jones Industrial and Bonava AB, you can compare the effects of market volatilities on Dow Jones and Bonava AB 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 Bonava AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bonava AB.
Diversification Opportunities for Dow Jones and Bonava AB
Very good diversification
The 3 months correlation between Dow and Bonava is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Bonava AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonava AB 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 Bonava AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonava AB has no effect on the direction of Dow Jones i.e., Dow Jones and Bonava AB go up and down completely randomly.
Pair Corralation between Dow Jones and Bonava AB
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.27 times more return on investment than Bonava AB. However, Dow Jones Industrial is 3.68 times less risky than Bonava AB. It trades about 0.2 of its potential returns per unit of risk. Bonava AB is currently generating about 0.04 per unit of risk. If you would invest 4,073,696 in Dow Jones Industrial on September 10, 2024 and sell it today you would earn a total of 390,556 from holding Dow Jones Industrial or generate 9.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Dow Jones Industrial vs. Bonava AB
Performance |
Timeline |
Dow Jones and Bonava AB Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bonava AB
Pair trading matchups for Bonava AB
Pair Trading with Dow Jones and Bonava AB
The main advantage of trading using opposite Dow Jones and Bonava AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Bonava AB 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 Bonava AB will offset losses from the drop in Bonava AB's long position.Dow Jones vs. SEI Investments | Dow Jones vs. Morgan Stanley | Dow Jones vs. CDW Corp | Dow Jones vs. Independence Realty Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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