Correlation Between Stride and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Stride 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 Stride and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stride Inc and Dow Jones Industrial, you can compare the effects of market volatilities on Stride 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 Stride with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stride and Dow Jones.
Diversification Opportunities for Stride and Dow Jones
Very weak diversification
The 3 months correlation between Stride and Dow is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stride Inc 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 Stride 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 Stride Inc 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 Stride i.e., Stride and Dow Jones go up and down completely randomly.
Pair Corralation between Stride and Dow Jones
Considering the 90-day investment horizon Stride Inc is expected to generate 2.33 times more return on investment than Dow Jones. However, Stride is 2.33 times more volatile than Dow Jones Industrial. It trades about 0.69 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of risk. If you would invest 10,902 in Stride Inc on November 9, 2024 and sell it today you would earn a total of 3,026 from holding Stride Inc or generate 27.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stride Inc vs. Dow Jones Industrial
Performance |
| Timeline |
Stride and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Stride Inc
Pair trading matchups for Stride
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Stride and Dow Jones
The main advantage of trading using opposite Stride and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stride 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.| Stride vs. Laureate Education | Stride vs. American Public Education | Stride vs. Lincoln Educational Services | Stride vs. Adtalem Global Education |
| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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