Correlation Between World Fuel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both World Fuel 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 World Fuel and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Fuel Services and Dow Jones Industrial, you can compare the effects of market volatilities on World Fuel 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 World Fuel with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Fuel and Dow Jones.
Diversification Opportunities for World Fuel and Dow Jones
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Dow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding World Fuel Services 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 World Fuel 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 World Fuel Services 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 World Fuel i.e., World Fuel and Dow Jones go up and down completely randomly.
Pair Corralation between World Fuel and Dow Jones
If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
World Fuel Services vs. Dow Jones Industrial
Performance |
| Timeline |
World Fuel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
World Fuel Services
Pair trading matchups for World Fuel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with World Fuel and Dow Jones
The main advantage of trading using opposite World Fuel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Fuel 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.| World Fuel vs. Delek Logistics Partners | World Fuel vs. Star Gas Partners | World Fuel vs. Delek Energy | World Fuel vs. Par Pacific Holdings |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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