Correlation Between Dow Jones and Illumin Holdings
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Illumin Holdings 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 Illumin Holdings 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 illumin Holdings, you can compare the effects of market volatilities on Dow Jones and Illumin Holdings 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 Illumin Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Illumin Holdings.
Diversification Opportunities for Dow Jones and Illumin Holdings
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Illumin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and illumin Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on illumin Holdings 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 Illumin Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of illumin Holdings has no effect on the direction of Dow Jones i.e., Dow Jones and Illumin Holdings go up and down completely randomly.
Pair Corralation between Dow Jones and Illumin Holdings
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.33 times more return on investment than Illumin Holdings. However, Dow Jones Industrial is 3.05 times less risky than Illumin Holdings. It trades about 0.26 of its potential returns per unit of risk. illumin Holdings is currently generating about 0.06 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. illumin Holdings
Performance |
| Timeline |
Dow Jones and Illumin Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
illumin Holdings
Pair trading matchups for Illumin Holdings
Pair Trading with Dow Jones and Illumin Holdings
The main advantage of trading using opposite Dow Jones and Illumin Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Illumin Holdings 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 Illumin Holdings will offset losses from the drop in Illumin Holdings' long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| Illumin Holdings vs. Boardwalktech Software Corp | Illumin Holdings vs. Snipp Interactive | Illumin Holdings vs. AirIQ Inc | Illumin Holdings vs. Gatekeeper Systems |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |