Correlation Between Dow Jones and Superior Uniform
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Superior Uniform 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 Superior Uniform 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 Superior Uniform Group, you can compare the effects of market volatilities on Dow Jones and Superior Uniform 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 Superior Uniform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Superior Uniform.
Diversification Opportunities for Dow Jones and Superior Uniform
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Superior is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Superior Uniform Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Uniform 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 Superior Uniform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Uniform has no effect on the direction of Dow Jones i.e., Dow Jones and Superior Uniform go up and down completely randomly.
Pair Corralation between Dow Jones and Superior Uniform
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.34 times more return on investment than Superior Uniform. However, Dow Jones Industrial is 2.97 times less risky than Superior Uniform. It trades about 0.2 of its potential returns per unit of risk. Superior Uniform Group is currently generating about -0.16 per unit of risk. If you would invest 4,348,783 in Dow Jones Industrial on November 18, 2024 and sell it today you would earn a total of 105,825 from holding Dow Jones Industrial or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Superior Uniform Group
Performance |
| Timeline |
Dow Jones and Superior Uniform Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Superior Uniform Group
Pair trading matchups for Superior Uniform
Pair Trading with Dow Jones and Superior Uniform
The main advantage of trading using opposite Dow Jones and Superior Uniform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Superior Uniform 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 Superior Uniform will offset losses from the drop in Superior Uniform's long position.| Dow Jones vs. Palomar Holdings | Dow Jones vs. Mesa Air Group | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Unum Group |
| Superior Uniform vs. Lakeland Industries | Superior Uniform vs. Jerash Holdings | Superior Uniform vs. G III Apparel Group | Superior Uniform vs. Gildan Activewear |
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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