Correlation Between Dow Jones and STANLN
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By analyzing existing cross correlation between Dow Jones Industrial and STANLN 7767 16 NOV 28, you can compare the effects of market volatilities on Dow Jones and STANLN 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 STANLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and STANLN.
Diversification Opportunities for Dow Jones and STANLN
Significant diversification
The 3 months correlation between Dow and STANLN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and STANLN 7767 16 NOV 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANLN 7767 16 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 STANLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANLN 7767 16 has no effect on the direction of Dow Jones i.e., Dow Jones and STANLN go up and down completely randomly.
Pair Corralation between Dow Jones and STANLN
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.8 times more return on investment than STANLN. However, Dow Jones is 1.8 times more volatile than STANLN 7767 16 NOV 28. It trades about 0.12 of its potential returns per unit of risk. STANLN 7767 16 NOV 28 is currently generating about -0.01 per unit of risk. If you would invest 3,515,104 in Dow Jones Industrial on September 14, 2024 and sell it today you would earn a total of 876,308 from holding Dow Jones Industrial or generate 24.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 53.73% |
| Values | Daily Returns |
Dow Jones Industrial vs. STANLN 7767 16 NOV 28
Performance |
| Timeline |
Dow Jones and STANLN Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
STANLN 7767 16 NOV 28
Pair trading matchups for STANLN
Pair Trading with Dow Jones and STANLN
The main advantage of trading using opposite Dow Jones and STANLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, STANLN 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 STANLN will offset losses from the drop in STANLN's long position.| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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