Correlation Between Dow Jones and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Huber Capital 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 Huber Capital 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 Huber Capital Mid, you can compare the effects of market volatilities on Dow Jones and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Huber Capital.
Diversification Opportunities for Dow Jones and Huber Capital
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Huber is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Huber Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Mid 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Mid has no effect on the direction of Dow Jones i.e., Dow Jones and Huber Capital go up and down completely randomly.
Pair Corralation between Dow Jones and Huber Capital
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.08 times less return on investment than Huber Capital. But when comparing it to its historical volatility, Dow Jones Industrial is 1.67 times less risky than Huber Capital. It trades about 0.2 of its potential returns per unit of risk. Huber Capital Mid is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,593 in Huber Capital Mid on September 3, 2024 and sell it today you would earn a total of 162.00 from holding Huber Capital Mid or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Huber Capital Mid
Performance |
| Timeline |
Dow Jones and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Huber Capital Mid
Pair trading matchups for Huber Capital
Pair Trading with Dow Jones and Huber Capital
The main advantage of trading using opposite Dow Jones and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Huber Capital vs. Janus Global Technology | Huber Capital vs. Pgim Jennison Technology | Huber Capital vs. Firsthand Technology Opportunities | Huber Capital vs. Hennessy Technology Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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