Correlation Between Dow Jones and Home Plate
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Home Plate 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 Home Plate 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 Home Plate Acquisition, you can compare the effects of market volatilities on Dow Jones and Home Plate 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 Home Plate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Home Plate.
Diversification Opportunities for Dow Jones and Home Plate
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Home is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Home Plate Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Plate Acquisition 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 Home Plate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Plate Acquisition has no effect on the direction of Dow Jones i.e., Dow Jones and Home Plate go up and down completely randomly.
Pair Corralation between Dow Jones and Home Plate
If you would invest 3,730,602 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 694,181 from holding Dow Jones Industrial or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Dow Jones Industrial vs. Home Plate Acquisition
Performance |
| Timeline |
Dow Jones and Home Plate Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Home Plate Acquisition
Pair trading matchups for Home Plate
Pair Trading with Dow Jones and Home Plate
The main advantage of trading using opposite Dow Jones and Home Plate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Home Plate 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 Home Plate will offset losses from the drop in Home Plate's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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