Correlation Between Dow Jones and HEALTHCARE
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By analyzing existing cross correlation between Dow Jones Industrial and HEALTHCARE TRUST OF, you can compare the effects of market volatilities on Dow Jones and HEALTHCARE 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 HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and HEALTHCARE.
Diversification Opportunities for Dow Jones and HEALTHCARE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and HEALTHCARE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and HEALTHCARE TRUST OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TRUST 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 HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TRUST has no effect on the direction of Dow Jones i.e., Dow Jones and HEALTHCARE go up and down completely randomly.
Pair Corralation between Dow Jones and HEALTHCARE
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.36 times more return on investment than HEALTHCARE. However, Dow Jones Industrial is 2.82 times less risky than HEALTHCARE. It trades about 0.36 of its potential returns per unit of risk. HEALTHCARE TRUST OF is currently generating about -0.23 per unit of risk. If you would invest 4,254,422 in Dow Jones Industrial on November 1, 2024 and sell it today you would earn a total of 216,930 from holding Dow Jones Industrial or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Dow Jones Industrial vs. HEALTHCARE TRUST OF
Performance |
| Timeline |
Dow Jones and HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
HEALTHCARE TRUST OF
Pair trading matchups for HEALTHCARE
Pair Trading with Dow Jones and HEALTHCARE
The main advantage of trading using opposite Dow Jones and HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, HEALTHCARE 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 HEALTHCARE will offset losses from the drop in HEALTHCARE's long position.| Dow Jones vs. WEC Energy Group | Dow Jones vs. Pure Cycle | Dow Jones vs. Tandy Leather Factory | Dow Jones vs. Tapestry |
| HEALTHCARE vs. Chester Mining | HEALTHCARE vs. Renesas Electronics | HEALTHCARE vs. Everspin Technologies | HEALTHCARE vs. CTS Corporation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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