Correlation Between BAKER and Dow Jones
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By analyzing existing cross correlation between BAKER HUGHES A and Dow Jones Industrial, you can compare the effects of market volatilities on BAKER 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 BAKER with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAKER and Dow Jones.
Diversification Opportunities for BAKER and Dow Jones
Excellent diversification
The 3 months correlation between BAKER and Dow is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BAKER HUGHES A 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 BAKER 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 BAKER HUGHES A 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 BAKER i.e., BAKER and Dow Jones go up and down completely randomly.
Pair Corralation between BAKER and Dow Jones
Assuming the 90 days trading horizon BAKER HUGHES A is expected to under-perform the Dow Jones. But the bond apears to be less risky and, when comparing its historical volatility, BAKER HUGHES A is 1.39 times less risky than Dow Jones. The bond trades about -0.21 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BAKER HUGHES A vs. Dow Jones Industrial
Performance |
| Timeline |
BAKER and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BAKER HUGHES A
Pair trading matchups for BAKER
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BAKER and Dow Jones
The main advantage of trading using opposite BAKER and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAKER 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.| BAKER vs. Sonida Senior Living | BAKER vs. Videolocity International | BAKER vs. Cardinal Health | BAKER vs. Zoom Video Communications |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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