Correlation Between Brigade High and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Brigade High 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 Brigade High and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brigade High Income and Dow Jones Industrial, you can compare the effects of market volatilities on Brigade High 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 Brigade High with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brigade High and Dow Jones.
Diversification Opportunities for Brigade High and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brigade and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Brigade High Income 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 Brigade High 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 Brigade High Income 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 Brigade High i.e., Brigade High and Dow Jones go up and down completely randomly.
Pair Corralation between Brigade High and Dow Jones
Assuming the 90 days horizon Brigade High is expected to generate 1.74 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Brigade High Income is 3.58 times less risky than Dow Jones. It trades about 0.22 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,815,030 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 658,627 from holding Dow Jones Industrial or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Brigade High Income vs. Dow Jones Industrial
Performance |
| Timeline |
Brigade High and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Brigade High Income
Pair trading matchups for Brigade High
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Brigade High and Dow Jones
The main advantage of trading using opposite Brigade High and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brigade High 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.| Brigade High vs. ALPSSmith Credit Opportunities | Brigade High vs. ALPSSmith Credit Opportunities | Brigade High vs. DEUTSCHE MID CAP | Brigade High vs. DEUTSCHE MID CAP |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |