Correlation Between Industrial Securities and Dow Jones
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By analyzing existing cross correlation between Industrial Securities Co and Dow Jones Industrial, you can compare the effects of market volatilities on Industrial Securities 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 Industrial Securities with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Securities and Dow Jones.
Diversification Opportunities for Industrial Securities and Dow Jones
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Dow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Securities Co 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 Industrial Securities 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 Industrial Securities Co 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 Industrial Securities i.e., Industrial Securities and Dow Jones go up and down completely randomly.
Pair Corralation between Industrial Securities and Dow Jones
Assuming the 90 days trading horizon Industrial Securities Co is expected to generate 3.02 times more return on investment than Dow Jones. However, Industrial Securities is 3.02 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 534.00 in Industrial Securities Co on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Industrial Securities Co or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Industrial Securities Co vs. Dow Jones Industrial
Performance |
| Timeline |
Industrial Securities and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Industrial Securities Co
Pair trading matchups for Industrial Securities
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Industrial Securities and Dow Jones
The main advantage of trading using opposite Industrial Securities and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Securities 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.| Industrial Securities vs. BeiGene | Industrial Securities vs. Kweichow Moutai Co | Industrial Securities vs. Beijing Roborock Technology | Industrial Securities vs. G bits Network Technology |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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