Correlation Between ÜSTRA Hannoversche and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ÜSTRA Hannoversche 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 ÜSTRA Hannoversche and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and Dow Jones Industrial, you can compare the effects of market volatilities on ÜSTRA Hannoversche 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 ÜSTRA Hannoversche with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ÜSTRA Hannoversche and Dow Jones.
Diversification Opportunities for ÜSTRA Hannoversche and Dow Jones
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ÜSTRA and Dow is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr 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 ÜSTRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe 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 ÜSTRA Hannoversche i.e., ÜSTRA Hannoversche and Dow Jones go up and down completely randomly.
Pair Corralation between ÜSTRA Hannoversche and Dow Jones
Assuming the 90 days horizon STRA Hannoversche Verkehrsbetriebe is expected to generate 2.37 times more return on investment than Dow Jones. However, ÜSTRA Hannoversche is 2.37 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.09 per unit of risk. If you would invest 960.00 in STRA Hannoversche Verkehrsbetriebe on December 3, 2024 and sell it today you would earn a total of 10.00 from holding STRA Hannoversche Verkehrsbetriebe or generate 1.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. Dow Jones Industrial
Performance |
Timeline |
ÜSTRA Hannoversche and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
STRA Hannoversche Verkehrsbetriebe
Pair trading matchups for ÜSTRA Hannoversche
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ÜSTRA Hannoversche and Dow Jones
The main advantage of trading using opposite ÜSTRA Hannoversche and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ÜSTRA Hannoversche 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.ÜSTRA Hannoversche vs. Tsingtao Brewery | ÜSTRA Hannoversche vs. Fevertree Drinks PLC | ÜSTRA Hannoversche vs. Corsair Gaming | ÜSTRA Hannoversche vs. Media and Games |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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