Correlation Between Dow Jones and Patriot National
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Patriot National 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 Patriot National 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 Patriot National Bancorp, you can compare the effects of market volatilities on Dow Jones and Patriot National 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 Patriot National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Patriot National.
Diversification Opportunities for Dow Jones and Patriot National
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Patriot is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Patriot National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot National Bancorp 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 Patriot National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot National Bancorp has no effect on the direction of Dow Jones i.e., Dow Jones and Patriot National go up and down completely randomly.
Pair Corralation between Dow Jones and Patriot National
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.15 times more return on investment than Patriot National. However, Dow Jones Industrial is 6.82 times less risky than Patriot National. It trades about 0.08 of its potential returns per unit of risk. Patriot National Bancorp is currently generating about -0.04 per unit of risk. If you would invest 3,410,864 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,080,201 from holding Dow Jones Industrial or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
Dow Jones Industrial vs. Patriot National Bancorp
Performance |
| Timeline |
Dow Jones and Patriot National Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Patriot National Bancorp
Pair trading matchups for Patriot National
Pair Trading with Dow Jones and Patriot National
The main advantage of trading using opposite Dow Jones and Patriot National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Patriot National 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 Patriot National will offset losses from the drop in Patriot National's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Patriot National vs. Citizens Bancorp Investment | Patriot National vs. First Keystone Corp | Patriot National vs. Greenville Federal Financial | Patriot National vs. Oak Ridge Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |