Correlation Between Dow Jones and KROGER
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By analyzing existing cross correlation between Dow Jones Industrial and KROGER 35 percent, you can compare the effects of market volatilities on Dow Jones and KROGER 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 KROGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and KROGER.
Diversification Opportunities for Dow Jones and KROGER
Weak diversification
The 3 months correlation between Dow and KROGER is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and KROGER 35 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KROGER 35 percent 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 KROGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KROGER 35 percent has no effect on the direction of Dow Jones i.e., Dow Jones and KROGER go up and down completely randomly.
Pair Corralation between Dow Jones and KROGER
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.72 times more return on investment than KROGER. However, Dow Jones is 1.72 times more volatile than KROGER 35 percent. It trades about 0.08 of its potential returns per unit of risk. KROGER 35 percent is currently generating about -0.01 per unit of risk. If you would invest 3,410,864 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,080,201 from holding Dow Jones Industrial or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.96% |
| Values | Daily Returns |
Dow Jones Industrial vs. KROGER 35 percent
Performance |
| Timeline |
Dow Jones and KROGER Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
KROGER 35 percent
Pair trading matchups for KROGER
Pair Trading with Dow Jones and KROGER
The main advantage of trading using opposite Dow Jones and KROGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, KROGER 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 KROGER will offset losses from the drop in KROGER's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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