Correlation Between High Coast and Dow Jones
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By analyzing existing cross correlation between High Coast Distillery and Dow Jones Industrial, you can compare the effects of market volatilities on High Coast 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 High Coast with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Coast and Dow Jones.
Diversification Opportunities for High Coast and Dow Jones
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between High and Dow is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding High Coast Distillery 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 High Coast 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 High Coast Distillery 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 High Coast i.e., High Coast and Dow Jones go up and down completely randomly.
Pair Corralation between High Coast and Dow Jones
Assuming the 90 days trading horizon High Coast is expected to generate 3.7 times less return on investment than Dow Jones. In addition to that, High Coast is 4.43 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 0.12 per unit of volatility. If you would invest 3,595,089 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 834,562 from holding Dow Jones Industrial or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Coast Distillery vs. Dow Jones Industrial
Performance |
| Timeline |
High Coast and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
High Coast Distillery
Pair trading matchups for High Coast
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with High Coast and Dow Jones
The main advantage of trading using opposite High Coast and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Coast 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.| High Coast vs. Cint Group AB | High Coast vs. Nordic Waterproofing Holding | High Coast vs. Inwido AB | High Coast vs. KABE Group AB |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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