Correlation Between DOW and Immunovant

By analyzing existing cross correlation between DOW and Immunovant, you can compare the effects of market volatilities on DOW and Immunovant 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 Immunovant. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOW and Immunovant.

Specify exactly 2 symbols:

Can any of the company-specific risk be diversified away by investing in both DOW and Immunovant 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 Immunovant into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for DOW and Immunovant

-0.23
  Correlation Coefficient
DOW
Immunovant

Very good diversification

The 3 months correlation between DOW and Immunovant is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding DOW and Immunovant in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Immunovant 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 Immunovant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunovant has no effect on the direction of DOW i.e., DOW and Immunovant go up and down completely randomly.
    Optimize

Pair Corralation between DOW and Immunovant

Given the investment horizon of 90 days DOW is expected to generate 0.17 times more return on investment than Immunovant. However, DOW is 5.88 times less risky than Immunovant. It trades about 0.08 of its potential returns per unit of risk. Immunovant is currently generating about -0.04 per unit of risk. If you would invest  2,768,691  in DOW on September 5, 2021 and sell it today you would earn a total of  689,317  from holding DOW or generate 24.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DOW  vs.  Immunovant

 Performance (%) 
      Timeline 

DOW and Immunovant Volatility Contrast

 Predicted Return Density 
      Returns 

DOW

Pair trading matchups for DOW

Twitter vs. DOW
Visa vs. DOW
Du Pont vs. DOW
Ford vs. DOW
Meta Platforms vs. DOW
Microsoft Corp vs. DOW
Walker Dunlop vs. DOW
Vmware vs. DOW
GM vs. DOW
Sentinelone Inc 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.

Immunovant

Pair trading matchups for Immunovant

Pair Trading with DOW and Immunovant

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

DOW

Pair trading matchups for DOW

Meta Platforms vs. DOW
Walker Dunlop vs. DOW
Salesforce vs. DOW
Du Pont vs. DOW
GM vs. DOW
Ford vs. DOW
Alphabet vs. DOW
Visa vs. DOW
Sentinelone Inc vs. DOW
Vmware 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 Immunovant 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.

Immunovant

Pair trading matchups for Immunovant

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 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.

Other Complementary Tools

Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Equity Search
Search for activelly traded equities including funds and ETFs from over 30 global markets
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go