Correlation Between Dow Jones and Softlogic Life
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By analyzing existing cross correlation between Dow Jones Industrial and Softlogic Life Insurance, you can compare the effects of market volatilities on Dow Jones and Softlogic Life 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 Softlogic Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Softlogic Life.
Diversification Opportunities for Dow Jones and Softlogic Life
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Softlogic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Softlogic Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softlogic Life Insurance 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 Softlogic Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softlogic Life Insurance has no effect on the direction of Dow Jones i.e., Dow Jones and Softlogic Life go up and down completely randomly.
Pair Corralation between Dow Jones and Softlogic Life
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.56 times more return on investment than Softlogic Life. However, Dow Jones Industrial is 1.79 times less risky than Softlogic Life. It trades about 0.29 of its potential returns per unit of risk. Softlogic Life Insurance is currently generating about 0.13 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. Softlogic Life Insurance
Performance |
| Timeline |
Dow Jones and Softlogic Life Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Softlogic Life Insurance
Pair trading matchups for Softlogic Life
Pair Trading with Dow Jones and Softlogic Life
The main advantage of trading using opposite Dow Jones and Softlogic Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Softlogic Life 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 Softlogic Life will offset losses from the drop in Softlogic Life's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| Softlogic Life vs. Renuka Agri Foods | Softlogic Life vs. Ceylon Tobacco | Softlogic Life vs. BROWNS INVESTMENTS PLC | Softlogic Life vs. Lanka Milk Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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