Correlation Between Dow Jones and PETROLEOS
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By analyzing existing cross correlation between Dow Jones Industrial and PETROLEOS MEXICANOS 65, you can compare the effects of market volatilities on Dow Jones and PETROLEOS 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 PETROLEOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and PETROLEOS.
Diversification Opportunities for Dow Jones and PETROLEOS
Very good diversification
The 3 months correlation between Dow and PETROLEOS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and PETROLEOS MEXICANOS 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PETROLEOS MEXICANOS 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 PETROLEOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PETROLEOS MEXICANOS has no effect on the direction of Dow Jones i.e., Dow Jones and PETROLEOS go up and down completely randomly.
Pair Corralation between Dow Jones and PETROLEOS
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.85 times more return on investment than PETROLEOS. However, Dow Jones Industrial is 1.17 times less risky than PETROLEOS. It trades about 0.16 of its potential returns per unit of risk. PETROLEOS MEXICANOS 65 is currently generating about 0.05 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.43% |
| Values | Daily Returns |
Dow Jones Industrial vs. PETROLEOS MEXICANOS 65
Performance |
| Timeline |
Dow Jones and PETROLEOS Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
PETROLEOS MEXICANOS 65
Pair trading matchups for PETROLEOS
Pair Trading with Dow Jones and PETROLEOS
The main advantage of trading using opposite Dow Jones and PETROLEOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, PETROLEOS 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 PETROLEOS will offset losses from the drop in PETROLEOS's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| PETROLEOS vs. AEP TEX INC | PETROLEOS vs. US BANK NATIONAL | PETROLEOS vs. Bank of America | PETROLEOS vs. GE Aerospace |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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