Correlation Between Dow Jones and QEP
Can any of the company-specific risk be diversified away by investing in both Dow Jones and QEP 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 QEP 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 QEP Co Inc, you can compare the effects of market volatilities on Dow Jones and QEP 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 QEP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and QEP.
Diversification Opportunities for Dow Jones and QEP
Excellent diversification
The 3 months correlation between Dow and QEP is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and QEP Co Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QEP Co Inc 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 QEP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QEP Co Inc has no effect on the direction of Dow Jones i.e., Dow Jones and QEP go up and down completely randomly.
Pair Corralation between Dow Jones and QEP
If you would invest 3,446,369 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 978,414 from holding Dow Jones Industrial or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. QEP Co Inc
Performance |
| Timeline |
Dow Jones and QEP Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
QEP Co Inc
Pair trading matchups for QEP
Pair Trading with Dow Jones and QEP
The main advantage of trading using opposite Dow Jones and QEP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, QEP 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 QEP will offset losses from the drop in QEP's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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