This module allows you to analyze existing cross correlation between OMX COPENHAGEN and DOW. You can compare the effects of market volatilities on OMX COPENHAGEN and DOW 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 OMX COPENHAGEN with a short position of DOW. See also your portfolio center
. Please also check ongoing floating volatility patterns of OMX COPENHAGEN
OMX COPENHAGEN vs. DOW
Assuming 30 trading days horizon, OMX COPENHAGEN is expected to generate 1.04 times more return on investment than DOW. However, OMX COPENHAGEN is 1.04 times more volatile than DOW. It trades about 0.11 of its potential returns per unit of risk. DOW is currently generating about 0.02 per unit of risk. 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 OMX COPENHAGEN and DOW
|Time Period||1 Month [change]|
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding OMX COPENHAGEN and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and OMX COPENHAGEN 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 OMX COPENHAGEN are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of OMX COPENHAGEN i.e. OMX COPENHAGEN and DOW go up and down completely randomly.
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