Correlation Between Streamwide and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Streamwide 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 Streamwide and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Streamwide and Dow Jones Industrial, you can compare the effects of market volatilities on Streamwide 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 Streamwide with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Streamwide and Dow Jones.
Diversification Opportunities for Streamwide and Dow Jones
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Streamwide and Dow is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Streamwide 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 Streamwide 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 Streamwide 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 Streamwide i.e., Streamwide and Dow Jones go up and down completely randomly.
Pair Corralation between Streamwide and Dow Jones
Assuming the 90 days trading horizon Streamwide is expected to generate 2.89 times more return on investment than Dow Jones. However, Streamwide is 2.89 times more volatile than Dow Jones Industrial. It trades about 0.05 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 1,850 in Streamwide on August 23, 2024 and sell it today you would earn a total of 920.00 from holding Streamwide or generate 49.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Streamwide vs. Dow Jones Industrial
Performance |
| Timeline |
Streamwide and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Streamwide
Pair trading matchups for Streamwide
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Streamwide and Dow Jones
The main advantage of trading using opposite Streamwide and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Streamwide 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.| Streamwide vs. Sidetrade | Streamwide vs. Esker SA | Streamwide vs. Xilam Animation | Streamwide vs. Wedia SA |
| Dow Jones vs. Barrick Gold Corp | Dow Jones vs. Jutal Offshore Oil | Dow Jones vs. Eastern Co | Dow Jones vs. Weyco Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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