Correlation Between Southland Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Southland Holdings 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 Southland Holdings and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southland Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on Southland Holdings 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 Southland Holdings with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and Dow Jones.
Diversification Opportunities for Southland Holdings and Dow Jones
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southland and Dow is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings 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 Southland Holdings 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 Southland Holdings 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 Southland Holdings i.e., Southland Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between Southland Holdings and Dow Jones
Given the investment horizon of 90 days Southland Holdings is expected to generate 9.36 times more return on investment than Dow Jones. However, Southland Holdings is 9.36 times more volatile than Dow Jones Industrial. It trades about 0.08 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 301.00 in Southland Holdings on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Southland Holdings or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
Southland Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Southland Holdings
Pair trading matchups for Southland Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Southland Holdings and Dow Jones
The main advantage of trading using opposite Southland Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings 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.| Southland Holdings vs. Citi Trends | Southland Holdings vs. American Eagle Outfitters | Southland Holdings vs. Summit Materials | Southland Holdings vs. Boot Barn Holdings |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |