Correlation Between Hugel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hugel 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 Hugel and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hugel Inc and Dow Jones Industrial, you can compare the effects of market volatilities on Hugel 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 Hugel with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugel and Dow Jones.
Diversification Opportunities for Hugel and Dow Jones
Modest diversification
The 3 months correlation between Hugel and Dow is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hugel Inc 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 Hugel 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 Hugel Inc 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 Hugel i.e., Hugel and Dow Jones go up and down completely randomly.
Pair Corralation between Hugel and Dow Jones
Assuming the 90 days trading horizon Hugel Inc is expected to generate 5.88 times more return on investment than Dow Jones. However, Hugel is 5.88 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.07 per unit of risk. If you would invest 26,850,000 in Hugel Inc on September 18, 2024 and sell it today you would earn a total of 300,000 from holding Hugel Inc or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Hugel Inc vs. Dow Jones Industrial
Performance |
| Timeline |
Hugel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hugel Inc
Pair trading matchups for Hugel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hugel and Dow Jones
The main advantage of trading using opposite Hugel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugel 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.| Hugel vs. Samsung Electronics Co | Hugel vs. Samsung Electronics Co | Hugel vs. SK Hynix | Hugel vs. SK Holdings Co |
| Dow Jones vs. Commonwealth Bank of | Dow Jones vs. AmTrust Financial Services | Dow Jones vs. Forsys Metals Corp | Dow Jones vs. Juniata Valley Financial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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