Correlation Between Keyera Corp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Keyera Corp 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 Keyera Corp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyera Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Keyera Corp 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 Keyera Corp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyera Corp and Dow Jones.
Diversification Opportunities for Keyera Corp and Dow Jones
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Keyera and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Keyera 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 Keyera Corp 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 Keyera 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 Keyera Corp i.e., Keyera Corp and Dow Jones go up and down completely randomly.
Pair Corralation between Keyera Corp and Dow Jones
Assuming the 90 days horizon Keyera Corp is expected to generate 0.97 times more return on investment than Dow Jones. However, Keyera Corp is 1.03 times less risky than Dow Jones. It trades about 0.54 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.22 per unit of risk. If you would invest 3,074 in Keyera Corp on August 27, 2024 and sell it today you would earn a total of 345.00 from holding Keyera Corp or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyera Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Keyera Corp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Keyera Corp
Pair trading matchups for Keyera Corp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Keyera Corp and Dow Jones
The main advantage of trading using opposite Keyera Corp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyera Corp 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.| Keyera Corp vs. GasLog Partners LP | Keyera Corp vs. Dynagas LNG Partners | Keyera Corp vs. CBL International Limited | Keyera Corp vs. Imperial Petroleum Preferred |
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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 Stocks Directory module to find actively traded stocks across global markets.
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