Correlation Between Dow Jones and GROUP
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By analyzing existing cross correlation between Dow Jones Industrial and GROUP 1 AUTOMOTIVE, you can compare the effects of market volatilities on Dow Jones and GROUP 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 GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and GROUP.
Diversification Opportunities for Dow Jones and GROUP
Excellent diversification
The 3 months correlation between Dow and GROUP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and GROUP 1 AUTOMOTIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GROUP 1 AUTOMOTIVE 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 GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GROUP 1 AUTOMOTIVE has no effect on the direction of Dow Jones i.e., Dow Jones and GROUP go up and down completely randomly.
Pair Corralation between Dow Jones and GROUP
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.74 times more return on investment than GROUP. However, Dow Jones Industrial is 1.35 times less risky than GROUP. It trades about 0.37 of its potential returns per unit of risk. GROUP 1 AUTOMOTIVE is currently generating about -0.29 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dow Jones Industrial vs. GROUP 1 AUTOMOTIVE
Performance |
| Timeline |
Dow Jones and GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
GROUP 1 AUTOMOTIVE
Pair trading matchups for GROUP
Pair Trading with Dow Jones and GROUP
The main advantage of trading using opposite Dow Jones and GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, GROUP 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 GROUP will offset losses from the drop in GROUP's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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