Correlation Between Blue Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Blue Capital 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 Blue Capital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Capital Reinsurance and Dow Jones Industrial, you can compare the effects of market volatilities on Blue Capital 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 Blue Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Capital and Dow Jones.
Diversification Opportunities for Blue Capital and Dow Jones
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blue and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Blue Capital Reinsurance 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 Blue Capital 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 Blue Capital Reinsurance 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 Blue Capital i.e., Blue Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Blue Capital and Dow Jones
If you would invest 3,611,738 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 879,327 from holding Dow Jones Industrial or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Blue Capital Reinsurance vs. Dow Jones Industrial
Performance |
| Timeline |
Blue Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Blue Capital Reinsurance
Pair trading matchups for Blue Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Blue Capital and Dow Jones
The main advantage of trading using opposite Blue Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Capital 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.| Blue Capital vs. Eastman Chemical | Blue Capital vs. Chemours Co | Blue Capital vs. The Mosaic | Blue Capital vs. CF Industries Holdings |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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