Correlation Between SIFCO Industries and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SIFCO Industries 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 SIFCO Industries and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIFCO Industries and Dow Jones Industrial, you can compare the effects of market volatilities on SIFCO Industries 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 SIFCO Industries with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIFCO Industries and Dow Jones.
Diversification Opportunities for SIFCO Industries and Dow Jones
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIFCO and Dow is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SIFCO Industries 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 SIFCO Industries 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 SIFCO Industries 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 SIFCO Industries i.e., SIFCO Industries and Dow Jones go up and down completely randomly.
Pair Corralation between SIFCO Industries and Dow Jones
Considering the 90-day investment horizon SIFCO Industries is expected to generate 2.93 times less return on investment than Dow Jones. In addition to that, SIFCO Industries is 2.93 times more volatile than Dow Jones Industrial. It trades about 0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIFCO Industries vs. Dow Jones Industrial
Performance |
| Timeline |
SIFCO Industries and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SIFCO Industries
Pair trading matchups for SIFCO Industries
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SIFCO Industries and Dow Jones
The main advantage of trading using opposite SIFCO Industries and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIFCO Industries 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.| SIFCO Industries vs. Ducommun Incorporated | SIFCO Industries vs. Park Electrochemical | SIFCO Industries vs. National Presto Industries | SIFCO Industries vs. Astronics |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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