Correlation Between FIRST MUTUAL and Dow Jones
Can any of the company-specific risk be diversified away by investing in both FIRST MUTUAL 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 FIRST MUTUAL and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST MUTUAL PROPERTIES and Dow Jones Industrial, you can compare the effects of market volatilities on FIRST MUTUAL 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 FIRST MUTUAL with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST MUTUAL and Dow Jones.
Diversification Opportunities for FIRST MUTUAL and Dow Jones
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIRST and Dow is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding FIRST MUTUAL PROPERTIES 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 FIRST MUTUAL 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 FIRST MUTUAL PROPERTIES 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 FIRST MUTUAL i.e., FIRST MUTUAL and Dow Jones go up and down completely randomly.
Pair Corralation between FIRST MUTUAL and Dow Jones
Assuming the 90 days trading horizon FIRST MUTUAL PROPERTIES is expected to generate 4.04 times more return on investment than Dow Jones. However, FIRST MUTUAL is 4.04 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.0 per unit of risk. If you would invest 3,826 in FIRST MUTUAL PROPERTIES on January 15, 2025 and sell it today you would earn a total of 9,214 from holding FIRST MUTUAL PROPERTIES or generate 240.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
FIRST MUTUAL PROPERTIES vs. Dow Jones Industrial
Performance |
| Timeline |
FIRST MUTUAL and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
FIRST MUTUAL PROPERTIES
Pair trading matchups for FIRST MUTUAL
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with FIRST MUTUAL and Dow Jones
The main advantage of trading using opposite FIRST MUTUAL and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST MUTUAL 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.| FIRST MUTUAL vs. Nedbank Group Limited | FIRST MUTUAL vs. AFRICAN DISTILLERS LIMITED | FIRST MUTUAL vs. ECONET WIRELESS HOLDINGS |
| Dow Jones vs. Flanigans Enterprises | Dow Jones vs. McDonalds | Dow Jones vs. Zoom Video Communications | Dow Jones vs. Nike Inc |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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