Correlation Between Savers Value and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Savers Value 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 Savers Value and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Savers Value Village, and Dow Jones Industrial, you can compare the effects of market volatilities on Savers Value 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 Savers Value with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savers Value and Dow Jones.
Diversification Opportunities for Savers Value and Dow Jones
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Savers and Dow is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Savers Value Village, 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 Savers Value 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 Savers Value Village, 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 Savers Value i.e., Savers Value and Dow Jones go up and down completely randomly.
Pair Corralation between Savers Value and Dow Jones
Considering the 90-day investment horizon Savers Value Village, is expected to under-perform the Dow Jones. In addition to that, Savers Value is 3.82 times more volatile than Dow Jones Industrial. It trades about -0.12 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of volatility. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Savers Value Village, vs. Dow Jones Industrial
Performance |
| Timeline |
Savers Value and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Savers Value Village,
Pair trading matchups for Savers Value
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Savers Value and Dow Jones
The main advantage of trading using opposite Savers Value and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savers Value 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.| Savers Value vs. Antero Midstream Partners | Savers Value vs. Fortress Transp Infra | Savers Value vs. Mitsubishi UFJ Lease | Savers Value vs. U Haul Holding |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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