Correlation Between Cadence Bancorp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cadence Bancorp 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 Cadence Bancorp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadence Bancorp and Dow Jones Industrial, you can compare the effects of market volatilities on Cadence Bancorp 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 Cadence Bancorp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Bancorp and Dow Jones.
Diversification Opportunities for Cadence Bancorp and Dow Jones
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cadence and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Bancorp 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 Cadence Bancorp 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 Cadence Bancorp 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 Cadence Bancorp i.e., Cadence Bancorp and Dow Jones go up and down completely randomly.
Pair Corralation between Cadence Bancorp and Dow Jones
Given the investment horizon of 90 days Cadence Bancorp is expected to generate 3.34 times more return on investment than Dow Jones. However, Cadence Bancorp is 3.34 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 0.08 per unit of risk. If you would invest 2,523 in Cadence Bancorp on August 26, 2024 and sell it today you would earn a total of 1,365 from holding Cadence Bancorp or generate 54.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadence Bancorp vs. Dow Jones Industrial
Performance |
| Timeline |
Cadence Bancorp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cadence Bancorp
Pair trading matchups for Cadence Bancorp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cadence Bancorp and Dow Jones
The main advantage of trading using opposite Cadence Bancorp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Bancorp 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.| Cadence Bancorp vs. NBT Bancorp | Cadence Bancorp vs. Financial Institutions | Cadence Bancorp vs. Berkshire Hills Bancorp | Cadence Bancorp vs. Fidelity DD Bancorp |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |