Correlation Between HAL Trust and Dow Jones
Can any of the company-specific risk be diversified away by investing in both HAL Trust 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 HAL Trust and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAL Trust and Dow Jones Industrial, you can compare the effects of market volatilities on HAL Trust 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 HAL Trust with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Dow Jones.
Diversification Opportunities for HAL Trust and Dow Jones
Excellent diversification
The 3 months correlation between HAL and Dow is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust 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 HAL Trust 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 HAL Trust 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 HAL Trust i.e., HAL Trust and Dow Jones go up and down completely randomly.
Pair Corralation between HAL Trust and Dow Jones
Assuming the 90 days trading horizon HAL Trust is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, HAL Trust is 1.43 times less risky than Dow Jones. The stock trades about -0.02 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HAL Trust vs. Dow Jones Industrial
Performance |
| Timeline |
HAL Trust and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HAL Trust
Pair trading matchups for HAL Trust
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with HAL Trust and Dow Jones
The main advantage of trading using opposite HAL Trust and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAL Trust 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.| HAL Trust vs. Ackermans Van Haaren | HAL Trust vs. Koninklijke Vopak NV | HAL Trust vs. Groep Brussel Lambert | HAL Trust vs. Sofina Socit Anonyme |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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