Correlation Between Dow Jones and YouGov Plc
Can any of the company-specific risk be diversified away by investing in both Dow Jones and YouGov Plc 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 YouGov Plc 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 YouGov plc, you can compare the effects of market volatilities on Dow Jones and YouGov Plc 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 YouGov Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and YouGov Plc.
Diversification Opportunities for Dow Jones and YouGov Plc
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and YouGov is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and YouGov plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YouGov plc 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 YouGov Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YouGov plc has no effect on the direction of Dow Jones i.e., Dow Jones and YouGov Plc go up and down completely randomly.
Pair Corralation between Dow Jones and YouGov Plc
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.2 times more return on investment than YouGov Plc. However, Dow Jones Industrial is 5.09 times less risky than YouGov Plc. It trades about 0.08 of its potential returns per unit of risk. YouGov plc is currently generating about -0.02 per unit of risk. If you would invest 3,347,646 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,124,560 from holding Dow Jones Industrial or generate 33.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dow Jones Industrial vs. YouGov plc
Performance |
| Timeline |
Dow Jones and YouGov Plc Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
YouGov plc
Pair trading matchups for YouGov Plc
Pair Trading with Dow Jones and YouGov Plc
The main advantage of trading using opposite Dow Jones and YouGov Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, YouGov Plc 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 YouGov Plc will offset losses from the drop in YouGov Plc's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| YouGov Plc vs. Hollywood Bowl Group | YouGov Plc vs. Direct Line Insurance | YouGov Plc vs. Supermarket Income REIT | YouGov Plc vs. Catalyst Media Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |