Correlation Between Dow Jones and Unique Fabricating
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Unique Fabricating 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 Unique Fabricating 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 Unique Fabricating, you can compare the effects of market volatilities on Dow Jones and Unique Fabricating 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 Unique Fabricating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Unique Fabricating.
Diversification Opportunities for Dow Jones and Unique Fabricating
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Unique is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Unique Fabricating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unique Fabricating 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 Unique Fabricating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unique Fabricating has no effect on the direction of Dow Jones i.e., Dow Jones and Unique Fabricating go up and down completely randomly.
Pair Corralation between Dow Jones and Unique Fabricating
If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 321,944 from holding Dow Jones Industrial or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Dow Jones Industrial vs. Unique Fabricating
Performance |
| Timeline |
Dow Jones and Unique Fabricating Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Unique Fabricating
Pair trading matchups for Unique Fabricating
Pair Trading with Dow Jones and Unique Fabricating
The main advantage of trading using opposite Dow Jones and Unique Fabricating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Unique Fabricating 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 Unique Fabricating will offset losses from the drop in Unique Fabricating's long position.| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
| Unique Fabricating vs. Aeva Technologies | Unique Fabricating vs. Innoviz Technologies | Unique Fabricating vs. Hesai Group American | Unique Fabricating vs. Luminar Technologies |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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