Correlation Between Shawcor and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Shawcor 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 Shawcor and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shawcor and Dow Jones Industrial, you can compare the effects of market volatilities on Shawcor 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 Shawcor with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shawcor and Dow Jones.
Diversification Opportunities for Shawcor and Dow Jones
Very poor diversification
The 3 months correlation between Shawcor and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shawcor 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 Shawcor 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 Shawcor 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 Shawcor i.e., Shawcor and Dow Jones go up and down completely randomly.
Pair Corralation between Shawcor and Dow Jones
If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Shawcor vs. Dow Jones Industrial
Performance |
| Timeline |
Shawcor and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shawcor
Pair trading matchups for Shawcor
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shawcor and Dow Jones
The main advantage of trading using opposite Shawcor and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shawcor 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.| Shawcor vs. STEP Energy Services | Shawcor vs. Total Energy Services | Shawcor vs. Trican Well Service | Shawcor vs. High Arctic Energy |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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