Correlation Between Wheels Up and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Wheels Up 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 Wheels Up and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheels Up Experience and Dow Jones Industrial, you can compare the effects of market volatilities on Wheels Up 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 Wheels Up with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheels Up and Dow Jones.
Diversification Opportunities for Wheels Up and Dow Jones
Weak diversification
The 3 months correlation between Wheels and Dow is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wheels Up Experience 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 Wheels Up 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 Wheels Up Experience 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 Wheels Up i.e., Wheels Up and Dow Jones go up and down completely randomly.
Pair Corralation between Wheels Up and Dow Jones
Allowing for the 90-day total investment horizon Wheels Up Experience is expected to generate 4.74 times more return on investment than Dow Jones. However, Wheels Up is 4.74 times more volatile than Dow Jones Industrial. It trades about 0.06 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 213.00 in Wheels Up Experience on August 24, 2024 and sell it today you would earn a total of 9.00 from holding Wheels Up Experience or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wheels Up Experience vs. Dow Jones Industrial
Performance |
| Timeline |
Wheels Up and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Wheels Up Experience
Pair trading matchups for Wheels Up
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Wheels Up and Dow Jones
The main advantage of trading using opposite Wheels Up and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheels Up 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.| Wheels Up vs. Blade Air Mobility | Wheels Up vs. Clear Secure | Wheels Up vs. Archer Aviation | Wheels Up vs. Beauty Health Co |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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