Correlation Between Dow Jones and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on Dow Jones and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Haier Smart.
Diversification Opportunities for Dow Jones and Haier Smart
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Haier is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of Dow Jones i.e., Dow Jones and Haier Smart go up and down completely randomly.
Pair Corralation between Dow Jones and Haier Smart
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.18 times less return on investment than Haier Smart. But when comparing it to its historical volatility, Dow Jones Industrial is 4.36 times less risky than Haier Smart. It trades about 0.2 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,230 in Haier Smart Home on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Haier Smart Home or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Haier Smart Home
Performance |
| Timeline |
Dow Jones and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Haier Smart Home
Pair trading matchups for Haier Smart
Pair Trading with Dow Jones and Haier Smart
The main advantage of trading using opposite Dow Jones and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Haier Smart vs. La Z Boy Incorporated | Haier Smart vs. MasterBrand | Haier Smart vs. MillerKnoll | Haier Smart vs. Flexsteel Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |