Correlation Between DOW and EAU TECHNOLOGIES

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Can any of the company-specific risk be diversified away by investing in both DOW and EAU TECHNOLOGIES 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 DOW and EAU TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOW and EAU TECHNOLOGIES INC, you can compare the effects of market volatilities on DOW and EAU TECHNOLOGIES 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 EAU TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOW and EAU TECHNOLOGIES.

Diversification Opportunities for DOW and EAU TECHNOLOGIES

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between DOW and EAU TECHNOLOGIES is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DOW and EAU TECHNOLOGIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAU TECHNOLOGIES INC 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 EAU TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAU TECHNOLOGIES INC has no effect on the direction of DOW i.e., DOW and EAU TECHNOLOGIES go up and down completely randomly.
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Pair Corralation between DOW and EAU TECHNOLOGIES

If you would invest (100.00)  in EAU TECHNOLOGIES INC on April 3, 2022 and sell it today you would earn a total of  100.00  from holding EAU TECHNOLOGIES INC or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

DOW  vs.  EAU TECHNOLOGIES INC

 Performance (%) 
      Timeline 

DOW and EAU TECHNOLOGIES Volatility Contrast

 Predicted Return Density 
      Returns 

DOW

Pair trading matchups for DOW

Sentinelone Inc vs. DOW
Vmware vs. DOW
ATT vs. DOW
Cyclacel Pharmaceuti vs. DOW
RENEWI PLC vs. DOW
BP PLC vs. DOW
Liquidia Corp vs. DOW
Calyxt vs. DOW
International Business vs. DOW
Arca Biopharma vs. DOW
Alphabet vs. DOW
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DOW as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DOW's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DOW's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DOW.

EAU TECHNOLOGIES INC

Pair trading matchups for EAU TECHNOLOGIES

Visa vs. EAU TECHNOLOGIES
BP PLC vs. EAU TECHNOLOGIES
Alzamend Neuro vs. EAU TECHNOLOGIES
Vmware vs. EAU TECHNOLOGIES
Solo Brands vs. EAU TECHNOLOGIES
Sentinelone Inc vs. EAU TECHNOLOGIES
Context Therapeutics vs. EAU TECHNOLOGIES
MITIE GROUP vs. EAU TECHNOLOGIES
Novan vs. EAU TECHNOLOGIES
RENEWI PLC vs. EAU TECHNOLOGIES
Cyclacel Pharmaceuti vs. EAU TECHNOLOGIES
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against EAU TECHNOLOGIES as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. EAU TECHNOLOGIES's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, EAU TECHNOLOGIES's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to EAU TECHNOLOGIES INC.

Pair Trading with DOW and EAU TECHNOLOGIES

The main advantage of trading using opposite DOW and EAU TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOW position performs unexpectedly, EAU TECHNOLOGIES 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 EAU TECHNOLOGIES will offset losses from the drop in EAU TECHNOLOGIES's long position.

DOW

Pair trading matchups for DOW

Cyclacel Pharmaceuti vs. DOW
Vmware vs. DOW
Context Therapeutics vs. DOW
Alzamend Neuro vs. DOW
ATT vs. DOW
Solo Brands vs. DOW
BP PLC vs. DOW
International Business vs. DOW
Sentinelone Inc vs. DOW
RENEWI PLC vs. DOW
MITIE GROUP vs. DOW
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DOW as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DOW's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DOW's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DOW.
The idea behind DOW and EAU TECHNOLOGIES INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

EAU TECHNOLOGIES INC

Pair trading matchups for EAU TECHNOLOGIES

RENEWI PLC vs. EAU TECHNOLOGIES
Seneca Foods vs. EAU TECHNOLOGIES
Novan vs. EAU TECHNOLOGIES
Sentinelone Inc vs. EAU TECHNOLOGIES
Context Therapeutics vs. EAU TECHNOLOGIES
Alzamend Neuro vs. EAU TECHNOLOGIES
MITIE GROUP vs. EAU TECHNOLOGIES
Vmware vs. EAU TECHNOLOGIES
GLAXOSMITHKLINE PLC vs. EAU TECHNOLOGIES
Alphabet vs. EAU TECHNOLOGIES
Liquidia Corp vs. EAU TECHNOLOGIES
Solo Brands vs. EAU TECHNOLOGIES
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against EAU TECHNOLOGIES as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. EAU TECHNOLOGIES's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, EAU TECHNOLOGIES's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to EAU TECHNOLOGIES INC.
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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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