Correlation Between Dow Jones and GENERAL
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By analyzing existing cross correlation between Dow Jones Industrial and GENERAL ELEC CAP, you can compare the effects of market volatilities on Dow Jones and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and GENERAL.
Diversification Opportunities for Dow Jones and GENERAL
Very weak diversification
The 3 months correlation between Dow and GENERAL is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Dow Jones i.e., Dow Jones and GENERAL go up and down completely randomly.
Pair Corralation between Dow Jones and GENERAL
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.87 times more return on investment than GENERAL. However, Dow Jones Industrial is 1.15 times less risky than GENERAL. It trades about 0.15 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about -0.56 per unit of risk. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 21.74% |
| Values | Daily Returns |
Dow Jones Industrial vs. GENERAL ELEC CAP
Performance |
| Timeline |
Dow Jones and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
GENERAL ELEC CAP
Pair trading matchups for GENERAL
Pair Trading with Dow Jones and GENERAL
The main advantage of trading using opposite Dow Jones and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| GENERAL vs. NioCorp Developments Ltd | GENERAL vs. Udemy Inc | GENERAL vs. Summa Silver Corp | GENERAL vs. Bright Scholar Education |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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