Correlation Between IRobot and Dow Jones
Can any of the company-specific risk be diversified away by investing in both IRobot 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 IRobot and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Dow Jones Industrial, you can compare the effects of market volatilities on IRobot 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 IRobot with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Dow Jones.
Diversification Opportunities for IRobot and Dow Jones
Pay attention - limited upside
The 3 months correlation between IRobot and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iRobot 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 IRobot 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 iRobot 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 IRobot i.e., IRobot and Dow Jones go up and down completely randomly.
Pair Corralation between IRobot and Dow Jones
Given the investment horizon of 90 days iRobot is expected to under-perform the Dow Jones. In addition to that, IRobot is 9.75 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 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iRobot vs. Dow Jones Industrial
Performance |
| Timeline |
IRobot and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
iRobot
Pair trading matchups for IRobot
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with IRobot and Dow Jones
The main advantage of trading using opposite IRobot and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot 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.| IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |