Correlation Analysis Between DOW and Twitter

This module allows you to analyze existing cross correlation between DOW and Twitter. You can compare the effects of market volatilities on DOW and Twitter 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 Twitter. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Twitter.
Horizon     30 Days    Login   to change
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Comparative Performance

 Predicted Return Density 
      Returns 

DOW  vs.  Twitter Inc

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 8.11 times less return on investment than Twitter. But when comparing it to its historical volatility, DOW is 2.46 times less risky than Twitter. It trades about 0.04 of its potential returns per unit of risk. Twitter is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,665  in Twitter on August 17, 2019 and sell it today you would earn a total of  612.00  from holding Twitter or generate 16.7% return on investment over 30 days.

Pair Corralation between DOW and Twitter

0.96
Time Period3 Months [change]
DirectionPositive 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for DOW and Twitter

DOW diversification synergy

Almost no diversification

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