Correlation Between Dow Jones and 842400HS5
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By analyzing existing cross correlation between Dow Jones Industrial and EIX 585 01 NOV 27, you can compare the effects of market volatilities on Dow Jones and 842400HS5 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 842400HS5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and 842400HS5.
Diversification Opportunities for Dow Jones and 842400HS5
Excellent diversification
The 3 months correlation between Dow and 842400HS5 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and EIX 585 01 NOV 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIX 585 01 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 842400HS5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIX 585 01 has no effect on the direction of Dow Jones i.e., Dow Jones and 842400HS5 go up and down completely randomly.
Pair Corralation between Dow Jones and 842400HS5
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.95 times more return on investment than 842400HS5. However, Dow Jones is 2.95 times more volatile than EIX 585 01 NOV 27. It trades about 0.34 of its potential returns per unit of risk. EIX 585 01 NOV 27 is currently generating about -0.05 per unit of risk. If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 291,093 from holding Dow Jones Industrial or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. EIX 585 01 NOV 27
Performance |
| Timeline |
Dow Jones and 842400HS5 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
EIX 585 01 NOV 27
Pair trading matchups for 842400HS5
Pair Trading with Dow Jones and 842400HS5
The main advantage of trading using opposite Dow Jones and 842400HS5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, 842400HS5 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 842400HS5 will offset losses from the drop in 842400HS5's long position.| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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