Correlation Between Barrow Hanley and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Barrow Hanley 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 Barrow Hanley and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrow Hanley Concentrated and Dow Jones Industrial, you can compare the effects of market volatilities on Barrow Hanley 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 Barrow Hanley with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrow Hanley and Dow Jones.
Diversification Opportunities for Barrow Hanley and Dow Jones
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barrow and Dow is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Barrow Hanley Concentrated 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 Barrow Hanley 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 Barrow Hanley Concentrated 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 Barrow Hanley i.e., Barrow Hanley and Dow Jones go up and down completely randomly.
Pair Corralation between Barrow Hanley and Dow Jones
Assuming the 90 days horizon Barrow Hanley Concentrated is expected to generate 1.18 times more return on investment than Dow Jones. However, Barrow Hanley is 1.18 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 940.00 in Barrow Hanley Concentrated on September 14, 2024 and sell it today you would earn a total of 18.00 from holding Barrow Hanley Concentrated or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrow Hanley Concentrated vs. Dow Jones Industrial
Performance |
| Timeline |
Barrow Hanley and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Barrow Hanley Concentrated
Pair trading matchups for Barrow Hanley
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Barrow Hanley and Dow Jones
The main advantage of trading using opposite Barrow Hanley and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrow Hanley 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.| Barrow Hanley vs. Ms Global Fixed | Barrow Hanley vs. Multimedia Portfolio Multimedia | Barrow Hanley vs. Huber Capital Equity | Barrow Hanley vs. Locorr Dynamic Equity |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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