Correlation Between InnovAge Holding and Dow Jones
Can any of the company-specific risk be diversified away by investing in both InnovAge Holding 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 InnovAge Holding and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnovAge Holding Corp and Dow Jones Industrial, you can compare the effects of market volatilities on InnovAge Holding 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 InnovAge Holding with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnovAge Holding and Dow Jones.
Diversification Opportunities for InnovAge Holding and Dow Jones
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InnovAge and Dow is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding InnovAge Holding Corp 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 InnovAge Holding 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 InnovAge Holding Corp 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 InnovAge Holding i.e., InnovAge Holding and Dow Jones go up and down completely randomly.
Pair Corralation between InnovAge Holding and Dow Jones
Given the investment horizon of 90 days InnovAge Holding Corp is expected to under-perform the Dow Jones. In addition to that, InnovAge Holding is 2.96 times more volatile than Dow Jones Industrial. It trades about -0.33 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
InnovAge Holding Corp vs. Dow Jones Industrial
Performance |
| Timeline |
InnovAge Holding and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
InnovAge Holding Corp
Pair trading matchups for InnovAge Holding
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with InnovAge Holding and Dow Jones
The main advantage of trading using opposite InnovAge Holding and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnovAge Holding 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.| InnovAge Holding vs. The Ensign Group | InnovAge Holding vs. Select Medical Holdings | InnovAge Holding vs. Encompass Health Corp | InnovAge Holding vs. Enhabit |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |