Correlation Between JDS UNIPHASE and Dow Jones
Can any of the company-specific risk be diversified away by investing in both JDS UNIPHASE 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 JDS UNIPHASE and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JDS UNIPHASE and Dow Jones Industrial, you can compare the effects of market volatilities on JDS UNIPHASE 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 JDS UNIPHASE with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of JDS UNIPHASE and Dow Jones.
Diversification Opportunities for JDS UNIPHASE and Dow Jones
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JDS and Dow is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding JDS UNIPHASE 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 JDS UNIPHASE 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 JDS UNIPHASE 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 JDS UNIPHASE i.e., JDS UNIPHASE and Dow Jones go up and down completely randomly.
Pair Corralation between JDS UNIPHASE and Dow Jones
Assuming the 90 days trading horizon JDS UNIPHASE is expected to generate 3.89 times more return on investment than Dow Jones. However, JDS UNIPHASE is 3.89 times more volatile than Dow Jones Industrial. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 640.00 in JDS UNIPHASE on November 3, 2024 and sell it today you would earn a total of 480.00 from holding JDS UNIPHASE or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JDS UNIPHASE vs. Dow Jones Industrial
Performance |
| Timeline |
JDS UNIPHASE and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
JDS UNIPHASE
Pair trading matchups for JDS UNIPHASE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with JDS UNIPHASE and Dow Jones
The main advantage of trading using opposite JDS UNIPHASE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JDS UNIPHASE 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.| JDS UNIPHASE vs. Soken Chemical Engineering | JDS UNIPHASE vs. Nomad Foods | JDS UNIPHASE vs. Silicon Motion Technology | JDS UNIPHASE vs. MONEYSUPERMARKET |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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