This module allows you to analyze existing cross correlation between DOW and OMX COPENHAGEN. You can compare the effects of market volatilities on DOW and OMX COPENHAGEN 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 DOW with a short position of OMX COPENHAGEN. See also your portfolio center
. Please also check ongoing floating volatility patterns of DOW
and OMX COPENHAGEN
DOW vs. OMX COPENHAGEN
Given the investment horizon of 30 days, DOW is expected to generate 5.57 times less return on investment than OMX COPENHAGEN. But when comparing it to its historical volatility, DOW is 1.04 times less risky than OMX COPENHAGEN. It trades about 0.02 of its potential returns per unit of risk. OMX COPENHAGEN is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 137,462 in OMX COPENHAGEN on June 17, 2018 and sell it today you would earn a total of 2,808 from holding OMX COPENHAGEN or generate 2.04% return on investment over 30 days.
Pair Corralation between DOW and OMX COPENHAGEN
|Time Period||1 Month [change]|
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding DOW and OMX COPENHAGEN in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on OMX COPENHAGEN and DOW 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 DOW are associated (or correlated) with OMX COPENHAGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMX COPENHAGEN has no effect on the direction of DOW i.e. DOW and OMX COPENHAGEN go up and down completely randomly.
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