Correlation Between Dow Jones and Grays Leasing
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Grays Leasing 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 Grays Leasing 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 Grays Leasing, you can compare the effects of market volatilities on Dow Jones and Grays Leasing 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 Grays Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Grays Leasing.
Diversification Opportunities for Dow Jones and Grays Leasing
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Grays is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing 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 Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of Dow Jones i.e., Dow Jones and Grays Leasing go up and down completely randomly.
Pair Corralation between Dow Jones and Grays Leasing
Assuming the 90 days trading horizon Dow Jones is expected to generate 7.46 times less return on investment than Grays Leasing. But when comparing it to its historical volatility, Dow Jones Industrial is 9.36 times less risky than Grays Leasing. It trades about 0.08 of its potential returns per unit of risk. Grays Leasing is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 308.00 in Grays Leasing on November 2, 2024 and sell it today you would earn a total of 201.00 from holding Grays Leasing or generate 65.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. Grays Leasing
Performance |
| Timeline |
Dow Jones and Grays Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Grays Leasing
Pair trading matchups for Grays Leasing
Pair Trading with Dow Jones and Grays Leasing
The main advantage of trading using opposite Dow Jones and Grays Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Grays Leasing 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 Grays Leasing will offset losses from the drop in Grays Leasing's long position.| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
| Grays Leasing vs. Masood Textile Mills | Grays Leasing vs. Fauji Foods | Grays Leasing vs. KSB Pumps | Grays Leasing vs. Mari Petroleum |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |