Correlation Between Old Market and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Old Market 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 Old Market and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Market Capital and Dow Jones Industrial, you can compare the effects of market volatilities on Old Market 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 Old Market with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Market and Dow Jones.
Diversification Opportunities for Old Market and Dow Jones
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Old and Dow is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Old Market Capital 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 Old Market 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 Old Market Capital 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 Old Market i.e., Old Market and Dow Jones go up and down completely randomly.
Pair Corralation between Old Market and Dow Jones
Given the investment horizon of 90 days Old Market Capital is expected to generate 2.69 times more return on investment than Dow Jones. However, Old Market is 2.69 times more volatile than Dow Jones Industrial. It trades about 0.09 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 590.00 in Old Market Capital on December 4, 2024 and sell it today you would earn a total of 60.00 from holding Old Market Capital or generate 10.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.33% |
Values | Daily Returns |
Old Market Capital vs. Dow Jones Industrial
Performance |
Timeline |
Old Market and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Old Market Capital
Pair trading matchups for Old Market
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Old Market and Dow Jones
The main advantage of trading using opposite Old Market and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Market 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.Old Market vs. Eerly Govt Ppty | Old Market vs. Rocky Brands | Old Market vs. Procter Gamble | Old Market vs. Envista Holdings Corp |
Dow Jones vs. Balchem | Dow Jones vs. Merit Medical Systems | Dow Jones vs. American Vanguard | Dow Jones vs. Regeneron Pharmaceuticals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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