Correlation Between Everest and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Everest and Dow Jones 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 Everest and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everest Group and Dow Jones Industrial, you can compare the effects of market volatilities on Everest and Dow Jones 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 Everest with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest and Dow Jones.
Diversification Opportunities for Everest and Dow Jones
Very good diversification
The 3 months correlation between Everest and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Everest 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 Everest Group are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Everest i.e., Everest and Dow Jones go up and down completely randomly.
Pair Corralation between Everest and Dow Jones
Allowing for the 90-day total investment horizon Everest is expected to generate 6.24 times less return on investment than Dow Jones. In addition to that, Everest is 1.98 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 4,292,489 in Dow Jones Industrial on August 23, 2024 and sell it today you would earn a total of 94,546 from holding Dow Jones Industrial or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everest Group vs. Dow Jones Industrial
Performance |
| Timeline |
Everest and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Everest Group
Pair trading matchups for Everest
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Everest and Dow Jones
The main advantage of trading using opposite Everest and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Everest vs. Maiden Holdings | Everest vs. Reinsurance Group of | Everest vs. Oxbridge Re Holdings | Everest vs. Greenlight Capital Re |
| Dow Jones vs. Barrick Gold Corp | Dow Jones vs. Jutal Offshore Oil | Dow Jones vs. Eastern Co | Dow Jones vs. Weyco 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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