Correlation Between WICKES GROUP and Dow Jones
Can any of the company-specific risk be diversified away by investing in both WICKES GROUP and Dow Jones 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 WICKES GROUP and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WICKES GROUP PLC and Dow Jones Industrial, you can compare the effects of market volatilities on WICKES GROUP and Dow Jones 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 WICKES GROUP with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of WICKES GROUP and Dow Jones.
Diversification Opportunities for WICKES GROUP and Dow Jones
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WICKES and Dow is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding WICKES GROUP PLC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and WICKES GROUP 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 WICKES GROUP PLC are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of WICKES GROUP i.e., WICKES GROUP and Dow Jones go up and down completely randomly.
Pair Corralation between WICKES GROUP and Dow Jones
Assuming the 90 days horizon WICKES GROUP is expected to generate 1.69 times less return on investment than Dow Jones. In addition to that, WICKES GROUP is 2.16 times more volatile than Dow Jones Industrial. It trades about 0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.18% |
| Values | Daily Returns |
WICKES GROUP PLC vs. Dow Jones Industrial
Performance |
| Timeline |
WICKES GROUP and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
WICKES GROUP PLC
Pair trading matchups for WICKES GROUP
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with WICKES GROUP and Dow Jones
The main advantage of trading using opposite WICKES GROUP and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WICKES GROUP position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| WICKES GROUP vs. CapitaLand Investment Limited | WICKES GROUP vs. PennyMac Mortgage Investment | WICKES GROUP vs. Jacquet Metal Service | WICKES GROUP vs. LION ONE METALS |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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