Correlation Between Crestwood Equity and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Crestwood Equity 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 Crestwood Equity and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crestwood Equity Partners and Dow Jones Industrial, you can compare the effects of market volatilities on Crestwood Equity 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 Crestwood Equity with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crestwood Equity and Dow Jones.
Diversification Opportunities for Crestwood Equity and Dow Jones
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Crestwood and Dow is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Crestwood Equity Partners 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 Crestwood Equity 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 Crestwood Equity Partners 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 Crestwood Equity i.e., Crestwood Equity and Dow Jones go up and down completely randomly.
Pair Corralation between Crestwood Equity and Dow Jones
Given the investment horizon of 90 days Crestwood Equity is expected to generate 1.01 times less return on investment than Dow Jones. In addition to that, Crestwood Equity is 2.41 times more volatile than Dow Jones Industrial. It trades about 0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,394,710 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 32.06% |
| Values | Daily Returns |
Crestwood Equity Partners vs. Dow Jones Industrial
Performance |
| Timeline |
Crestwood Equity and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Crestwood Equity Partners
Pair trading matchups for Crestwood Equity
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Crestwood Equity and Dow Jones
The main advantage of trading using opposite Crestwood Equity and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crestwood Equity 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.| Crestwood Equity vs. Western Midstream Partners | Crestwood Equity vs. DT Midstream | Crestwood Equity vs. MPLX LP | Crestwood Equity vs. Enterprise Products Partners |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |