Correlation Between Photocure and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Photocure 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 Photocure and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photocure and Dow Jones Industrial, you can compare the effects of market volatilities on Photocure 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 Photocure with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photocure and Dow Jones.
Diversification Opportunities for Photocure and Dow Jones
Significant diversification
The 3 months correlation between Photocure and Dow is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Photocure 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 Photocure 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 Photocure 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 Photocure i.e., Photocure and Dow Jones go up and down completely randomly.
Pair Corralation between Photocure and Dow Jones
Assuming the 90 days trading horizon Photocure is expected to under-perform the Dow Jones. In addition to that, Photocure is 2.61 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.04 per unit of volatility. If you would invest 4,257,373 in Dow Jones Industrial on December 30, 2024 and sell it today you would lose (98,983) from holding Dow Jones Industrial or give up 2.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.88% |
Values | Daily Returns |
Photocure vs. Dow Jones Industrial
Performance |
Timeline |
Photocure and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Photocure
Pair trading matchups for Photocure
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Photocure and Dow Jones
The main advantage of trading using opposite Photocure and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocure 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.Photocure vs. Jaeren Sparebank | Photocure vs. SpareBank 1 stlandet | Photocure vs. Melhus Sparebank | Photocure vs. 5Th Planet Games |
Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Companhia Siderurgica Nacional | Dow Jones vs. POSCO Holdings | Dow Jones vs. Grupo Simec SAB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |