Correlation Between Trek Resources and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Trek Resources 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 Trek Resources and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trek Resources and Dow Jones Industrial, you can compare the effects of market volatilities on Trek Resources 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 Trek Resources with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trek Resources and Dow Jones.
Diversification Opportunities for Trek Resources and Dow Jones
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trek and Dow is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Trek Resources 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 Trek Resources 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 Trek Resources 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 Trek Resources i.e., Trek Resources and Dow Jones go up and down completely randomly.
Pair Corralation between Trek Resources and Dow Jones
If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trek Resources vs. Dow Jones Industrial
Performance |
| Timeline |
Trek Resources and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Trek Resources
Pair trading matchups for Trek Resources
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Trek Resources and Dow Jones
The main advantage of trading using opposite Trek Resources and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trek Resources 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.| Trek Resources vs. Permian Resources | Trek Resources vs. Devon Energy | Trek Resources vs. EOG Resources | Trek Resources vs. Coterra Energy |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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