Correlation Between Dow Jones and Synergy CHC
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Synergy CHC 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 Synergy CHC 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 Synergy CHC Corp, you can compare the effects of market volatilities on Dow Jones and Synergy CHC 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 Synergy CHC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Synergy CHC.
Diversification Opportunities for Dow Jones and Synergy CHC
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Synergy is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Synergy CHC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergy CHC Corp 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 Synergy CHC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergy CHC Corp has no effect on the direction of Dow Jones i.e., Dow Jones and Synergy CHC go up and down completely randomly.
Pair Corralation between Dow Jones and Synergy CHC
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.1 times more return on investment than Synergy CHC. However, Dow Jones Industrial is 9.71 times less risky than Synergy CHC. It trades about 0.34 of its potential returns per unit of risk. Synergy CHC Corp is currently generating about -0.01 per unit of risk. If you would invest 4,252,836 in Dow Jones Industrial on November 8, 2024 and sell it today you would earn a total of 221,927 from holding Dow Jones Industrial or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Synergy CHC Corp
Performance |
| Timeline |
Dow Jones and Synergy CHC Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Synergy CHC Corp
Pair trading matchups for Synergy CHC
Pair Trading with Dow Jones and Synergy CHC
The main advantage of trading using opposite Dow Jones and Synergy CHC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Synergy CHC 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 Synergy CHC will offset losses from the drop in Synergy CHC's long position.| Dow Jones vs. National Vision Holdings | Dow Jones vs. Grocery Outlet Holding | Dow Jones vs. Asbury Automotive Group | Dow Jones vs. Hanover Foods |
| Synergy CHC vs. Patterson Companies | Synergy CHC vs. Henry Schein | Synergy CHC vs. EDAP TMS SA | Synergy CHC vs. Cardinal Health |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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