Correlation Between Sparekassen Sjaelland and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sparekassen Sjaelland 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 Sparekassen Sjaelland and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparekassen Sjaelland Fyn AS and Dow Jones Industrial, you can compare the effects of market volatilities on Sparekassen Sjaelland 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 Sparekassen Sjaelland with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparekassen Sjaelland and Dow Jones.
Diversification Opportunities for Sparekassen Sjaelland and Dow Jones
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sparekassen and Dow is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sparekassen Sjaelland Fyn AS 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 Sparekassen Sjaelland 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 Sparekassen Sjaelland Fyn AS 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 Sparekassen Sjaelland i.e., Sparekassen Sjaelland and Dow Jones go up and down completely randomly.
Pair Corralation between Sparekassen Sjaelland and Dow Jones
Assuming the 90 days trading horizon Sparekassen Sjaelland Fyn AS is expected to generate 1.5 times more return on investment than Dow Jones. However, Sparekassen Sjaelland is 1.5 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of risk. If you would invest 21,250 in Sparekassen Sjaelland Fyn AS on September 13, 2024 and sell it today you would earn a total of 1,650 from holding Sparekassen Sjaelland Fyn AS or generate 7.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Sparekassen Sjaelland Fyn AS vs. Dow Jones Industrial
Performance |
Timeline |
Sparekassen Sjaelland and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Sparekassen Sjaelland Fyn AS
Pair trading matchups for Sparekassen Sjaelland
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sparekassen Sjaelland and Dow Jones
The main advantage of trading using opposite Sparekassen Sjaelland and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparekassen Sjaelland 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.Sparekassen Sjaelland vs. FLSmidth Co | Sparekassen Sjaelland vs. Danske Bank AS | Sparekassen Sjaelland vs. ISS AS | Sparekassen Sjaelland vs. DSV Panalpina AS |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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