Correlation Between Stamper Oil and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Stamper Oil 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 Stamper Oil and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stamper Oil Gas and Dow Jones Industrial, you can compare the effects of market volatilities on Stamper Oil 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 Stamper Oil with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stamper Oil and Dow Jones.
Diversification Opportunities for Stamper Oil and Dow Jones
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stamper and Dow is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Stamper Oil Gas 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 Stamper Oil 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 Stamper Oil Gas 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 Stamper Oil i.e., Stamper Oil and Dow Jones go up and down completely randomly.
Pair Corralation between Stamper Oil and Dow Jones
Assuming the 90 days trading horizon Stamper Oil Gas is expected to generate 25.07 times more return on investment than Dow Jones. However, Stamper Oil is 25.07 times more volatile than Dow Jones Industrial. It trades about 0.23 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.16 per unit of risk. If you would invest 2.00 in Stamper Oil Gas on December 1, 2024 and sell it today you would earn a total of 1.50 from holding Stamper Oil Gas or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stamper Oil Gas vs. Dow Jones Industrial
Performance |
| Timeline |
Stamper Oil and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Stamper Oil Gas
Pair trading matchups for Stamper Oil
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Stamper Oil and Dow Jones
The main advantage of trading using opposite Stamper Oil and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stamper Oil 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.| Stamper Oil vs. Western Investment | Stamper Oil vs. NeXGold Mining Corp | Stamper Oil vs. Upstart Investments | Stamper Oil vs. Canadian General Investments |
| Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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