Correlation Between Silver Spike and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Silver Spike 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 Silver Spike and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Spike Investment and Dow Jones Industrial, you can compare the effects of market volatilities on Silver Spike 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 Silver Spike with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Spike and Dow Jones.
Diversification Opportunities for Silver Spike and Dow Jones
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silver and Dow is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Silver Spike Investment 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 Silver Spike 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 Silver Spike Investment 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 Silver Spike i.e., Silver Spike and Dow Jones go up and down completely randomly.
Pair Corralation between Silver Spike and Dow Jones
If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Silver Spike Investment vs. Dow Jones Industrial
Performance |
| Timeline |
Silver Spike and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Silver Spike Investment
Pair trading matchups for Silver Spike
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Silver Spike and Dow Jones
The main advantage of trading using opposite Silver Spike and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Spike 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.| Silver Spike vs. Entourage Health Corp | Silver Spike vs. Avicanna | Silver Spike vs. Benchmark Botanics | Silver Spike vs. Speakeasy Cannabis Club |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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