Correlation Between Dow Jones and 05526DBF1
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By analyzing existing cross correlation between Dow Jones Industrial and B A T, you can compare the effects of market volatilities on Dow Jones and 05526DBF1 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 05526DBF1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and 05526DBF1.
Diversification Opportunities for Dow Jones and 05526DBF1
Very weak diversification
The 3 months correlation between Dow and 05526DBF1 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and B A T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 05526DBF1 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 05526DBF1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 05526DBF1 has no effect on the direction of Dow Jones i.e., Dow Jones and 05526DBF1 go up and down completely randomly.
Pair Corralation between Dow Jones and 05526DBF1
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the 05526DBF1. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.75 times less risky than 05526DBF1. The index trades about -0.21 of its potential returns per unit of risk. The B A T is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 8,041 in B A T on November 28, 2024 and sell it today you would lose (177.00) from holding B A T or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. B A T
Performance |
| Timeline |
Dow Jones and 05526DBF1 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
B A T
Pair trading matchups for 05526DBF1
Pair Trading with Dow Jones and 05526DBF1
The main advantage of trading using opposite Dow Jones and 05526DBF1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, 05526DBF1 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 05526DBF1 will offset losses from the drop in 05526DBF1's long position.| Dow Jones vs. Starbucks | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Finnair Oyj | Dow Jones vs. Mesa Air Group |
| 05526DBF1 vs. Eldorado Gold Corp | 05526DBF1 vs. Two Harbors Investments | 05526DBF1 vs. AG Mortgage Investment | 05526DBF1 vs. Axcelis 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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