Correlation Between Dow Jones and VULCAN
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By analyzing existing cross correlation between Dow Jones Industrial and VULCAN MATLS 39, you can compare the effects of market volatilities on Dow Jones and VULCAN 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 VULCAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and VULCAN.
Diversification Opportunities for Dow Jones and VULCAN
Significant diversification
The 3 months correlation between Dow and VULCAN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and VULCAN MATLS 39 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VULCAN MATLS 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 VULCAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VULCAN MATLS has no effect on the direction of Dow Jones i.e., Dow Jones and VULCAN go up and down completely randomly.
Pair Corralation between Dow Jones and VULCAN
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the VULCAN. In addition to that, Dow Jones is 3.9 times more volatile than VULCAN MATLS 39. It trades about -0.27 of its total potential returns per unit of risk. VULCAN MATLS 39 is currently generating about 0.12 per unit of volatility. If you would invest 9,837 in VULCAN MATLS 39 on November 29, 2024 and sell it today you would earn a total of 36.00 from holding VULCAN MATLS 39 or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. VULCAN MATLS 39
Performance |
| Timeline |
Dow Jones and VULCAN Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
VULCAN MATLS 39
Pair trading matchups for VULCAN
Pair Trading with Dow Jones and VULCAN
The main advantage of trading using opposite Dow Jones and VULCAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, VULCAN 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 VULCAN will offset losses from the drop in VULCAN's long position.| Dow Jones vs. Starbucks | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Finnair Oyj | Dow Jones vs. Mesa Air Group |
| VULCAN vs. Corning Incorporated | VULCAN vs. Companhia Siderurgica Nacional | VULCAN vs. Allegheny Technologies Incorporated | VULCAN vs. LB Foster |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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