Correlation Between Craven House and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Craven House 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 Craven House and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Craven House Capital and Dow Jones Industrial, you can compare the effects of market volatilities on Craven House 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 Craven House with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Craven House and Dow Jones.
Diversification Opportunities for Craven House and Dow Jones
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Craven and Dow is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Craven House Capital 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 Craven House 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 Craven House Capital 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 Craven House i.e., Craven House and Dow Jones go up and down completely randomly.
Pair Corralation between Craven House and Dow Jones
Assuming the 90 days trading horizon Craven House Capital is expected to generate 1.96 times more return on investment than Dow Jones. However, Craven House is 1.96 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of risk. If you would invest 23.00 in Craven House Capital on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Craven House Capital or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Craven House Capital vs. Dow Jones Industrial
Performance |
| Timeline |
Craven House and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Craven House Capital
Pair trading matchups for Craven House
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Craven House and Dow Jones
The main advantage of trading using opposite Craven House and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Craven House 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.| Craven House vs. Livermore Investments Group | Craven House vs. Tata Steel Limited | Craven House vs. United States Steel | Craven House vs. CleanTech Lithium plc |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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