Correlation Between Dow Jones and Flaherty Crumrine
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Flaherty Crumrine 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 Flaherty Crumrine 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 Flaherty Crumrine Preferred, you can compare the effects of market volatilities on Dow Jones and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Flaherty Crumrine.
Diversification Opportunities for Dow Jones and Flaherty Crumrine
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Flaherty is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Flaherty Crumrine Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Dow Jones i.e., Dow Jones and Flaherty Crumrine go up and down completely randomly.
Pair Corralation between Dow Jones and Flaherty Crumrine
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.08 times less return on investment than Flaherty Crumrine. In addition to that, Dow Jones is 1.15 times more volatile than Flaherty Crumrine Preferred. It trades about 0.13 of its total potential returns per unit of risk. Flaherty Crumrine Preferred is currently generating about 0.16 per unit of volatility. If you would invest 715.00 in Flaherty Crumrine Preferred on August 24, 2024 and sell it today you would earn a total of 187.00 from holding Flaherty Crumrine Preferred or generate 26.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Flaherty Crumrine Preferred
Performance |
| Timeline |
Dow Jones and Flaherty Crumrine Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Flaherty Crumrine Preferred
Pair trading matchups for Flaherty Crumrine
Pair Trading with Dow Jones and Flaherty Crumrine
The main advantage of trading using opposite Dow Jones and Flaherty Crumrine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Flaherty Crumrine 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 Flaherty Crumrine will offset losses from the drop in Flaherty Crumrine's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Flaherty Crumrine vs. Flaherty Crumrine Preferredome | Flaherty Crumrine vs. Flaherty Crumrine Preferred | Flaherty Crumrine vs. Flaherty and Crumrine | Flaherty Crumrine vs. John Hancock Preferred |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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