Correlation Between KCI SA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both KCI SA 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 KCI SA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCI SA and Dow Jones Industrial, you can compare the effects of market volatilities on KCI SA 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 KCI SA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCI SA and Dow Jones.
Diversification Opportunities for KCI SA and Dow Jones
Good diversification
The 3 months correlation between KCI and Dow is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KCI SA 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 KCI SA 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 KCI SA 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 KCI SA i.e., KCI SA and Dow Jones go up and down completely randomly.
Pair Corralation between KCI SA and Dow Jones
Assuming the 90 days trading horizon KCI SA is expected to generate 3.25 times more return on investment than Dow Jones. However, KCI SA is 3.25 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 83.00 in KCI SA on December 28, 2024 and sell it today you would earn a total of 10.00 from holding KCI SA or generate 12.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.77% |
Values | Daily Returns |
KCI SA vs. Dow Jones Industrial
Performance |
Timeline |
KCI SA and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
KCI SA
Pair trading matchups for KCI SA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KCI SA and Dow Jones
The main advantage of trading using opposite KCI SA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCI SA 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.KCI SA vs. Medicalg | KCI SA vs. Noble Financials SA | KCI SA vs. True Games Syndicate | KCI SA vs. Movie Games SA |
Dow Jones vs. PennantPark Investment | Dow Jones vs. Western Asset Investment | Dow Jones vs. Yoshitsu Co Ltd | Dow Jones vs. Black Hills |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Global Correlations Find global opportunities by holding instruments from different markets | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |