Correlation Between Dow Jones and Conifer Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Conifer Holding 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 Conifer Holding 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 Conifer Holding, you can compare the effects of market volatilities on Dow Jones and Conifer Holding 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 Conifer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Conifer Holding.
Diversification Opportunities for Dow Jones and Conifer Holding
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Conifer is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Conifer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifer Holding 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 Conifer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifer Holding has no effect on the direction of Dow Jones i.e., Dow Jones and Conifer Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Conifer Holding
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.83 times less return on investment than Conifer Holding. But when comparing it to its historical volatility, Dow Jones Industrial is 10.57 times less risky than Conifer Holding. It trades about 0.08 of its potential returns per unit of risk. Conifer Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 154.00 in Conifer Holding on August 25, 2024 and sell it today you would lose (35.00) from holding Conifer Holding or give up 22.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Dow Jones Industrial vs. Conifer Holding
Performance |
| Timeline |
Dow Jones and Conifer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Conifer Holding
Pair trading matchups for Conifer Holding
Pair Trading with Dow Jones and Conifer Holding
The main advantage of trading using opposite Dow Jones and Conifer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Conifer Holding 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 Conifer Holding will offset losses from the drop in Conifer Holding's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Conifer Holding vs. Wilhelmina | Conifer Holding vs. Unico American | Conifer Holding vs. Creative Media Community | Conifer Holding vs. Kingstone Companies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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