Correlation Between Reacap Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Reacap Financial 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 Reacap Financial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reacap Financial Investments and Dow Jones Industrial, you can compare the effects of market volatilities on Reacap Financial 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 Reacap Financial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and Dow Jones.
Diversification Opportunities for Reacap Financial and Dow Jones
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reacap and Dow is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments 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 Reacap Financial 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 Reacap Financial Investments 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 Reacap Financial i.e., Reacap Financial and Dow Jones go up and down completely randomly.
Pair Corralation between Reacap Financial and Dow Jones
Assuming the 90 days trading horizon Reacap Financial Investments is expected to under-perform the Dow Jones. In addition to that, Reacap Financial is 2.66 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.03 per unit of volatility. If you would invest 4,293,160 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 55,623 from holding Dow Jones Industrial or generate 1.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 80.95% |
Values | Daily Returns |
Reacap Financial Investments vs. Dow Jones Industrial
Performance |
Timeline |
Reacap Financial and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Reacap Financial Investments
Pair trading matchups for Reacap Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Reacap Financial and Dow Jones
The main advantage of trading using opposite Reacap Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reacap Financial 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.Reacap Financial vs. ODIN Investments | Reacap Financial vs. Sidi Kerir Petrochemicals | Reacap Financial vs. Egyptian Transport | Reacap Financial vs. Saudi Egyptian Investment |
Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Commodity Directory Find actively traded commodities issued by global exchanges |