Correlation Between Dow Jones and FREEPORT
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By analyzing existing cross correlation between Dow Jones Industrial and FREEPORT MCMORAN INC 525, you can compare the effects of market volatilities on Dow Jones and FREEPORT 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 FREEPORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and FREEPORT.
Diversification Opportunities for Dow Jones and FREEPORT
Good diversification
The 3 months correlation between Dow and FREEPORT is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and FREEPORT MCMORAN INC 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREEPORT MCMORAN INC 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 FREEPORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREEPORT MCMORAN INC has no effect on the direction of Dow Jones i.e., Dow Jones and FREEPORT go up and down completely randomly.
Pair Corralation between Dow Jones and FREEPORT
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.14 times more return on investment than FREEPORT. However, Dow Jones is 1.14 times more volatile than FREEPORT MCMORAN INC 525. It trades about 0.08 of its potential returns per unit of risk. FREEPORT MCMORAN INC 525 is currently generating about 0.01 per unit of risk. If you would invest 3,326,977 in Dow Jones Industrial on September 25, 2024 and sell it today you would earn a total of 963,718 from holding Dow Jones Industrial or generate 28.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Dow Jones Industrial vs. FREEPORT MCMORAN INC 525
Performance |
Timeline |
Dow Jones and FREEPORT Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
FREEPORT MCMORAN INC 525
Pair trading matchups for FREEPORT
Pair Trading with Dow Jones and FREEPORT
The main advantage of trading using opposite Dow Jones and FREEPORT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, FREEPORT 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 FREEPORT will offset losses from the drop in FREEPORT's long position.Dow Jones vs. Aerofoam Metals | Dow Jones vs. Lion One Metals | Dow Jones vs. Blue Moon Metals | Dow Jones vs. Xunlei Ltd Adr |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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