Correlation Between Great Eastern and Dow Jones
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By analyzing existing cross correlation between The Great Eastern and Dow Jones Industrial, you can compare the effects of market volatilities on Great Eastern 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 Great Eastern with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Eastern and Dow Jones.
Diversification Opportunities for Great Eastern and Dow Jones
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Dow is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Great Eastern 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 Great Eastern 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 The Great Eastern 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 Great Eastern i.e., Great Eastern and Dow Jones go up and down completely randomly.
Pair Corralation between Great Eastern and Dow Jones
Assuming the 90 days trading horizon The Great Eastern is expected to under-perform the Dow Jones. In addition to that, Great Eastern is 2.83 times more volatile than Dow Jones Industrial. It trades about -0.12 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of volatility. If you would invest 4,093,693 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 397,372 from holding Dow Jones Industrial or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Great Eastern vs. Dow Jones Industrial
Performance |
| Timeline |
Great Eastern and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
The Great Eastern
Pair trading matchups for Great Eastern
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Great Eastern and Dow Jones
The main advantage of trading using opposite Great Eastern and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Eastern 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.| Great Eastern vs. Reliance Industries Limited | Great Eastern vs. HDFC Bank Limited | Great Eastern vs. Tata Consultancy Services | Great Eastern vs. Bharti Airtel Limited |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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.
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