Correlation Between Dow Jones and BROOKDALE
Can any of the company-specific risk be diversified away by investing in both Dow Jones and BROOKDALE 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 Dow Jones and BROOKDALE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and BROOKDALE SR LIVING, you can compare the effects of market volatilities on Dow Jones and BROOKDALE 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 BROOKDALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BROOKDALE.
Diversification Opportunities for Dow Jones and BROOKDALE
Excellent diversification
The 3 months correlation between Dow and BROOKDALE is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and BROOKDALE SR LIVING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKDALE SR LIVING 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 BROOKDALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKDALE SR LIVING has no effect on the direction of Dow Jones i.e., Dow Jones and BROOKDALE go up and down completely randomly.
Pair Corralation between Dow Jones and BROOKDALE
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the BROOKDALE. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 3.95 times less risky than BROOKDALE. The index trades about -0.01 of its potential returns per unit of risk. The BROOKDALE SR LIVING is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 510.00 in BROOKDALE SR LIVING on September 12, 2024 and sell it today you would earn a total of 5.00 from holding BROOKDALE SR LIVING or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. BROOKDALE SR LIVING
Performance |
| Timeline |
Dow Jones and BROOKDALE Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BROOKDALE SR LIVING
Pair trading matchups for BROOKDALE
Pair Trading with Dow Jones and BROOKDALE
The main advantage of trading using opposite Dow Jones and BROOKDALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BROOKDALE 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 BROOKDALE will offset losses from the drop in BROOKDALE's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| BROOKDALE vs. FARO Technologies | BROOKDALE vs. DELTA AIR LINES | BROOKDALE vs. Altair Engineering | BROOKDALE vs. Digilife Technologies 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |