Correlation Between SP Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SP Group 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 SP Group and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Group AS and Dow Jones Industrial, you can compare the effects of market volatilities on SP Group 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 SP Group with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Group and Dow Jones.
Diversification Opportunities for SP Group and Dow Jones
Average diversification
The 3 months correlation between SPG and Dow is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SP Group AS 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 SP Group 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 SP Group AS 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 SP Group i.e., SP Group and Dow Jones go up and down completely randomly.
Pair Corralation between SP Group and Dow Jones
Assuming the 90 days trading horizon SP Group is expected to generate 1.0 times less return on investment than Dow Jones. In addition to that, SP Group is 2.48 times more volatile than Dow Jones Industrial. It trades about 0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of volatility. If you would invest 4,133,505 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 352,526 from holding Dow Jones Industrial or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
SP Group AS vs. Dow Jones Industrial
Performance |
| Timeline |
SP Group and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SP Group AS
Pair trading matchups for SP Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SP Group and Dow Jones
The main advantage of trading using opposite SP Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Group 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.| SP Group vs. Schouw Co | SP Group vs. Per Aarsleff Holding | SP Group vs. HH International AS | SP Group vs. DFDS AS |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |