Correlation Between JRW Utility and Dow Jones
Can any of the company-specific risk be diversified away by investing in both JRW Utility 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 JRW Utility and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JRW Utility Public and Dow Jones Industrial, you can compare the effects of market volatilities on JRW Utility 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 JRW Utility with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of JRW Utility and Dow Jones.
Diversification Opportunities for JRW Utility and Dow Jones
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JRW and Dow is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding JRW Utility Public 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 JRW Utility 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 JRW Utility Public 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 JRW Utility i.e., JRW Utility and Dow Jones go up and down completely randomly.
Pair Corralation between JRW Utility and Dow Jones
Assuming the 90 days horizon JRW Utility Public is expected to under-perform the Dow Jones. In addition to that, JRW Utility is 1.98 times more volatile than Dow Jones Industrial. It trades about -0.22 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.3 per unit of volatility. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 276,911 from holding Dow Jones Industrial or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JRW Utility Public vs. Dow Jones Industrial
Performance |
| Timeline |
JRW Utility and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
JRW Utility Public
Pair trading matchups for JRW Utility
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with JRW Utility and Dow Jones
The main advantage of trading using opposite JRW Utility and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JRW Utility 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.| JRW Utility vs. Kiattana Transport Public | JRW Utility vs. JKN Global Media | JRW Utility vs. Asian Insulators PCL | JRW Utility vs. JCK International Public |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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