Correlation Between Dow Jones and CONSUMERS
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By analyzing existing cross correlation between Dow Jones Industrial and CONSUMERS ENERGY 395, you can compare the effects of market volatilities on Dow Jones and CONSUMERS 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 CONSUMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CONSUMERS.
Diversification Opportunities for Dow Jones and CONSUMERS
Excellent diversification
The 3 months correlation between Dow and CONSUMERS is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CONSUMERS ENERGY 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSUMERS ENERGY 5 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 CONSUMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSUMERS ENERGY 5 has no effect on the direction of Dow Jones i.e., Dow Jones and CONSUMERS go up and down completely randomly.
Pair Corralation between Dow Jones and CONSUMERS
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the CONSUMERS. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.61 times less risky than CONSUMERS. The index trades about -0.19 of its potential returns per unit of risk. The CONSUMERS ENERGY 395 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,897 in CONSUMERS ENERGY 395 on November 28, 2024 and sell it today you would earn a total of 32.00 from holding CONSUMERS ENERGY 395 or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 42.86% |
| Values | Daily Returns |
Dow Jones Industrial vs. CONSUMERS ENERGY 395
Performance |
| Timeline |
Dow Jones and CONSUMERS Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CONSUMERS ENERGY 395
Pair trading matchups for CONSUMERS
Pair Trading with Dow Jones and CONSUMERS
The main advantage of trading using opposite Dow Jones and CONSUMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, CONSUMERS 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 CONSUMERS will offset losses from the drop in CONSUMERS's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| CONSUMERS vs. Altria Group | CONSUMERS vs. ZhongAn Online P | CONSUMERS vs. 51Talk Online Education | CONSUMERS vs. Stagwell |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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