Correlation Between Saint Jean and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Saint Jean 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 Saint Jean and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saint Jean Groupe and Dow Jones Industrial, you can compare the effects of market volatilities on Saint Jean 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 Saint Jean with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saint Jean and Dow Jones.
Diversification Opportunities for Saint Jean and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saint and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Saint Jean Groupe 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 Saint Jean 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 Saint Jean Groupe 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 Saint Jean i.e., Saint Jean and Dow Jones go up and down completely randomly.
Pair Corralation between Saint Jean and Dow Jones
Assuming the 90 days trading horizon Saint Jean Groupe is expected to generate 3.3 times more return on investment than Dow Jones. However, Saint Jean is 3.3 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of risk. If you would invest 1,970 in Saint Jean Groupe on November 4, 2024 and sell it today you would earn a total of 90.00 from holding Saint Jean Groupe or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Saint Jean Groupe vs. Dow Jones Industrial
Performance |
| Timeline |
Saint Jean and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Saint Jean Groupe
Pair trading matchups for Saint Jean
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Saint Jean and Dow Jones
The main advantage of trading using opposite Saint Jean and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saint Jean 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.The idea behind Saint Jean Groupe and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |