Correlation Between Dow Jones and Exagen
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Exagen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dow Jones and Exagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Exagen Inc, you can compare the effects of market volatilities on Dow Jones and Exagen 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 Exagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Exagen.
Diversification Opportunities for Dow Jones and Exagen
Weak diversification
The 3 months correlation between Dow and Exagen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Exagen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exagen Inc 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 Exagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exagen Inc has no effect on the direction of Dow Jones i.e., Dow Jones and Exagen go up and down completely randomly.
Pair Corralation between Dow Jones and Exagen
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.19 times less return on investment than Exagen. But when comparing it to its historical volatility, Dow Jones Industrial is 7.17 times less risky than Exagen. It trades about 0.12 of its potential returns per unit of risk. Exagen Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 319.00 in Exagen Inc on August 31, 2024 and sell it today you would earn a total of 78.00 from holding Exagen Inc or generate 24.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Exagen Inc
Performance |
| Timeline |
Dow Jones and Exagen Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Exagen Inc
Pair trading matchups for Exagen
Pair Trading with Dow Jones and Exagen
The main advantage of trading using opposite Dow Jones and Exagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Exagen 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 Exagen will offset losses from the drop in Exagen'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 |
| Exagen vs. Fonar | Exagen vs. Burning Rock Biotech | Exagen vs. Sera Prognostics | Exagen vs. Castle Biosciences |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |