Correlation Between Sparinvest INDEX and Dow Jones
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By analyzing existing cross correlation between Sparinvest INDEX Mellem and Dow Jones Industrial, you can compare the effects of market volatilities on Sparinvest INDEX 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 Sparinvest INDEX with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparinvest INDEX and Dow Jones.
Diversification Opportunities for Sparinvest INDEX and Dow Jones
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sparinvest and Dow is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sparinvest INDEX Mellem 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 Sparinvest INDEX 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 Sparinvest INDEX Mellem 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 Sparinvest INDEX i.e., Sparinvest INDEX and Dow Jones go up and down completely randomly.
Pair Corralation between Sparinvest INDEX and Dow Jones
Assuming the 90 days trading horizon Sparinvest INDEX Mellem is expected to generate 0.56 times more return on investment than Dow Jones. However, Sparinvest INDEX Mellem is 1.77 times less risky than Dow Jones. It trades about 0.07 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 11,800 in Sparinvest INDEX Mellem on October 10, 2024 and sell it today you would earn a total of 230.00 from holding Sparinvest INDEX Mellem or generate 1.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Sparinvest INDEX Mellem vs. Dow Jones Industrial
Performance |
Timeline |
Sparinvest INDEX and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Sparinvest INDEX Mellem
Pair trading matchups for Sparinvest INDEX
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sparinvest INDEX and Dow Jones
The main advantage of trading using opposite Sparinvest INDEX and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparinvest INDEX 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.Sparinvest INDEX vs. Sparinvest INDEX Europa | Sparinvest INDEX vs. Sparinvest INDEX Hj | Sparinvest INDEX vs. Sparinvest SICAV Procedo | Sparinvest INDEX vs. Sparinvest Mellemlange |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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