Correlation Between Heartland Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Heartland Financial 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 Heartland Financial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Dow Jones Industrial, you can compare the effects of market volatilities on Heartland Financial 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 Heartland Financial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Dow Jones.
Diversification Opportunities for Heartland Financial and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heartland and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA 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 Heartland Financial 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 Heartland Financial USA 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 Heartland Financial i.e., Heartland Financial and Dow Jones go up and down completely randomly.
Pair Corralation between Heartland Financial and Dow Jones
Assuming the 90 days horizon Heartland Financial is expected to generate 6.52 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Heartland Financial USA is 3.1 times less risky than Dow Jones. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Heartland Financial USA vs. Dow Jones Industrial
Performance |
| Timeline |
Heartland Financial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Heartland Financial USA
Pair trading matchups for Heartland Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Heartland Financial and Dow Jones
The main advantage of trading using opposite Heartland Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial 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.| Heartland Financial vs. Capital One Financial | Heartland Financial vs. Capital One Financial | Heartland Financial vs. Bank of America |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |