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Correlation Between DOW and Bunge

Analyzing existing cross correlation between DOW and Bunge Limited. You can compare the effects of market volatilities on DOW and Bunge 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 Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOW and Bunge.

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Diversification Opportunities for DOW and Bunge

DOW diversification synergy
0.19
DOW
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Average diversification

The 3 months correlation between DOW and Bunge is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding DOW and Bunge Limited in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited 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 Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of DOW i.e. DOW and Bunge go up and down completely randomly.
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Pair Corralation between DOW and Bunge

Given the investment horizon of 30 days, DOW is expected to generate 0.64 times more return on investment than Bunge. However, DOW is 1.56 times less risky than Bunge. It trades about 0.07 of its potential returns per unit of risk. Bunge Limited is currently generating about -0.01 per unit of risk. If you would invest  2,806,647  in DOW on January 23, 2020 and sell it today you would earn a total of  92,594  from holding DOW or generate 3.3% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy96.77%
ValuesDaily Returns

DOW  vs.  Bunge Limited

 Performance (%) 
    
  Timeline 
 Predicted Return Density 
    
  Returns 
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