Correlation Between Dow Jones and Sharp
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Sharp 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 Sharp 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 Sharp, you can compare the effects of market volatilities on Dow Jones and Sharp 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 Sharp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sharp.
Diversification Opportunities for Dow Jones and Sharp
Pay attention - limited upside
The 3 months correlation between Dow and Sharp is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sharp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharp 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 Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharp has no effect on the direction of Dow Jones i.e., Dow Jones and Sharp go up and down completely randomly.
Pair Corralation between Dow Jones and Sharp
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.54 times more return on investment than Sharp. However, Dow Jones Industrial is 1.87 times less risky than Sharp. It trades about 0.13 of its potential returns per unit of risk. Sharp is currently generating about 0.05 per unit of risk. If you would invest 3,885,286 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 501,749 from holding Dow Jones Industrial or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sharp
Performance |
| Timeline |
Dow Jones and Sharp Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sharp
Pair trading matchups for Sharp
Pair Trading with Dow Jones and Sharp
The main advantage of trading using opposite Dow Jones and Sharp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sharp 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 Sharp will offset losses from the drop in Sharp's long position.| Dow Jones vs. Barrick Gold Corp | Dow Jones vs. Jutal Offshore Oil | Dow Jones vs. Eastern Co | Dow Jones vs. Weyco Group |
| Sharp vs. TCL Electronics Holdings | Sharp vs. Casio Computer Co | Sharp vs. Xiaomi Corp | Sharp vs. Samsung Electronics Co |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |