Correlation Between Marine Petroleum and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Marine Petroleum 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 Marine Petroleum and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Petroleum Trust and Dow Jones Industrial, you can compare the effects of market volatilities on Marine Petroleum 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 Marine Petroleum with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Petroleum and Dow Jones.
Diversification Opportunities for Marine Petroleum and Dow Jones
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marine and Dow is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Marine Petroleum Trust 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 Marine Petroleum 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 Marine Petroleum Trust 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 Marine Petroleum i.e., Marine Petroleum and Dow Jones go up and down completely randomly.
Pair Corralation between Marine Petroleum and Dow Jones
Assuming the 90 days horizon Marine Petroleum Trust is expected to under-perform the Dow Jones. In addition to that, Marine Petroleum is 4.43 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,389,102 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,040,549 from holding Dow Jones Industrial or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Petroleum Trust vs. Dow Jones Industrial
Performance |
| Timeline |
Marine Petroleum and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Marine Petroleum Trust
Pair trading matchups for Marine Petroleum
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Marine Petroleum and Dow Jones
The main advantage of trading using opposite Marine Petroleum and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Petroleum 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.| Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. Brooge Holdings | Marine Petroleum vs. Dynagas LNG Partners |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |