Correlation Between REC and Dow Jones
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By analyzing existing cross correlation between REC Limited and Dow Jones Industrial, you can compare the effects of market volatilities on REC 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 REC with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC and Dow Jones.
Diversification Opportunities for REC and Dow Jones
Average diversification
The 3 months correlation between REC and Dow is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding REC Limited 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 REC 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 REC Limited 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 REC i.e., REC and Dow Jones go up and down completely randomly.
Pair Corralation between REC and Dow Jones
Assuming the 90 days trading horizon REC Limited is expected to under-perform the Dow Jones. In addition to that, REC is 5.13 times more volatile than Dow Jones Industrial. It trades about -0.16 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of volatility. If you would invest 4,263,520 in Dow Jones Industrial on November 9, 2024 and sell it today you would earn a total of 211,243 from holding Dow Jones Industrial or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
REC Limited vs. Dow Jones Industrial
Performance |
| Timeline |
REC and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
REC Limited
Pair trading matchups for REC
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with REC and Dow Jones
The main advantage of trading using opposite REC and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC 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.| REC vs. Hisar Metal Industries | REC vs. Syrma SGS Technology | REC vs. Computer Age Management | REC vs. Indian Metals Ferro |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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