Correlation Between Dow Jones and Kempower Oyj
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By analyzing existing cross correlation between Dow Jones Industrial and Kempower Oyj, you can compare the effects of market volatilities on Dow Jones and Kempower Oyj 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 Kempower Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Kempower Oyj.
Diversification Opportunities for Dow Jones and Kempower Oyj
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Kempower is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Kempower Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kempower Oyj 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 Kempower Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kempower Oyj has no effect on the direction of Dow Jones i.e., Dow Jones and Kempower Oyj go up and down completely randomly.
Pair Corralation between Dow Jones and Kempower Oyj
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.28 times more return on investment than Kempower Oyj. However, Dow Jones Industrial is 3.51 times less risky than Kempower Oyj. It trades about 0.13 of its potential returns per unit of risk. Kempower Oyj is currently generating about -0.05 per unit of risk. If you would invest 4,139,378 in Dow Jones Industrial on September 13, 2024 and sell it today you would earn a total of 252,034 from holding Dow Jones Industrial or generate 6.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Dow Jones Industrial vs. Kempower Oyj
Performance |
Timeline |
Dow Jones and Kempower Oyj Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Kempower Oyj
Pair trading matchups for Kempower Oyj
Pair Trading with Dow Jones and Kempower Oyj
The main advantage of trading using opposite Dow Jones and Kempower Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Kempower Oyj 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 Kempower Oyj will offset losses from the drop in Kempower Oyj's long position.Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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