Correlation Between Dow Jones and PHILIP
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By analyzing existing cross correlation between Dow Jones Industrial and PHILIP MORRIS INTL, you can compare the effects of market volatilities on Dow Jones and PHILIP 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 PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and PHILIP.
Diversification Opportunities for Dow Jones and PHILIP
Excellent diversification
The 3 months correlation between Dow and PHILIP is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and PHILIP MORRIS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTL 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 PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTL has no effect on the direction of Dow Jones i.e., Dow Jones and PHILIP go up and down completely randomly.
Pair Corralation between Dow Jones and PHILIP
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.72 times more return on investment than PHILIP. However, Dow Jones Industrial is 1.39 times less risky than PHILIP. It trades about 0.16 of its potential returns per unit of risk. PHILIP MORRIS INTL is currently generating about -0.1 per unit of risk. If you would invest 4,233,015 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 239,191 from holding Dow Jones Industrial or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. PHILIP MORRIS INTL
Performance |
| Timeline |
Dow Jones and PHILIP Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
PHILIP MORRIS INTL
Pair trading matchups for PHILIP
Pair Trading with Dow Jones and PHILIP
The main advantage of trading using opposite Dow Jones and PHILIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, PHILIP 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 PHILIP will offset losses from the drop in PHILIP'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 |
| PHILIP vs. Corporacion America Airports | PHILIP vs. Everus Construction Group | PHILIP vs. Primoris Services | PHILIP vs. ChampionX |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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