Correlation Between Dow Jones and LOWES
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By analyzing existing cross correlation between Dow Jones Industrial and LOWES PANIES INC, you can compare the effects of market volatilities on Dow Jones and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and LOWES.
Diversification Opportunities for Dow Jones and LOWES
Excellent diversification
The 3 months correlation between Dow and LOWES is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and LOWES PANIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES PANIES INC 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES PANIES INC has no effect on the direction of Dow Jones i.e., Dow Jones and LOWES go up and down completely randomly.
Pair Corralation between Dow Jones and LOWES
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.43 times more return on investment than LOWES. However, Dow Jones Industrial is 2.31 times less risky than LOWES. It trades about -0.01 of its potential returns per unit of risk. LOWES PANIES INC is currently generating about -0.19 per unit of risk. If you would invest 4,429,313 in Dow Jones Industrial on September 12, 2024 and sell it today you would lose (4,530) from holding Dow Jones Industrial or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. LOWES PANIES INC
Performance |
| Timeline |
Dow Jones and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
LOWES PANIES INC
Pair trading matchups for LOWES
Pair Trading with Dow Jones and LOWES
The main advantage of trading using opposite Dow Jones and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| LOWES vs. Perseus Mining Limited | LOWES vs. Paiute Oil Mining | LOWES vs. Patterson UTI Energy | LOWES vs. Precision Drilling |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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