Correlation Between Dow Jones and Blue Sail
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By analyzing existing cross correlation between Dow Jones Industrial and Blue Sail Medical, you can compare the effects of market volatilities on Dow Jones and Blue Sail 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 Dow Jones with a short position of Blue Sail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Blue Sail.
Diversification Opportunities for Dow Jones and Blue Sail
Very weak diversification
The 3 months correlation between Dow and Blue is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Blue Sail Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sail Medical and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Blue Sail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sail Medical has no effect on the direction of Dow Jones i.e., Dow Jones and Blue Sail go up and down completely randomly.
Pair Corralation between Dow Jones and Blue Sail
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.52 times more return on investment than Blue Sail. However, Dow Jones Industrial is 1.93 times less risky than Blue Sail. It trades about 0.17 of its potential returns per unit of risk. Blue Sail Medical is currently generating about -0.39 per unit of risk. If you would invest 4,234,224 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 114,559 from holding Dow Jones Industrial or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Blue Sail Medical
Performance |
| Timeline |
Dow Jones and Blue Sail Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Blue Sail Medical
Pair trading matchups for Blue Sail
Pair Trading with Dow Jones and Blue Sail
The main advantage of trading using opposite Dow Jones and Blue Sail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Blue Sail 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 Blue Sail will offset losses from the drop in Blue Sail's long position.| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
| Blue Sail vs. Beijing Bewinner Communications | Blue Sail vs. Jilin Jlu Communication | Blue Sail vs. Nanjing Putian Telecommunications | Blue Sail vs. China Mobile Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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