Correlation Between Stabilis Solutions and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Stabilis Solutions 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 Stabilis Solutions and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stabilis Solutions and Dow Jones Industrial, you can compare the effects of market volatilities on Stabilis Solutions 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 Stabilis Solutions with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stabilis Solutions and Dow Jones.
Diversification Opportunities for Stabilis Solutions and Dow Jones
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stabilis and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Stabilis Solutions 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 Stabilis Solutions 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 Stabilis Solutions 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 Stabilis Solutions i.e., Stabilis Solutions and Dow Jones go up and down completely randomly.
Pair Corralation between Stabilis Solutions and Dow Jones
Given the investment horizon of 90 days Stabilis Solutions is expected to generate 4.17 times more return on investment than Dow Jones. However, Stabilis Solutions is 4.17 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of risk. If you would invest 393.00 in Stabilis Solutions on September 2, 2024 and sell it today you would earn a total of 115.00 from holding Stabilis Solutions or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stabilis Solutions vs. Dow Jones Industrial
Performance |
| Timeline |
Stabilis Solutions and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Stabilis Solutions
Pair trading matchups for Stabilis Solutions
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Stabilis Solutions and Dow Jones
The main advantage of trading using opposite Stabilis Solutions and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stabilis Solutions 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.| Stabilis Solutions vs. Equinor ASA ADR | Stabilis Solutions vs. TotalEnergies SE ADR | Stabilis Solutions vs. Ecopetrol SA ADR | Stabilis Solutions vs. National Fuel Gas |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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