Correlation Between CAPITAL and Dow Jones
Specify exactly 2 symbols:
By analyzing existing cross correlation between CAPITAL ONE FINL and Dow Jones Industrial, you can compare the effects of market volatilities on CAPITAL 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 CAPITAL with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAPITAL and Dow Jones.
Diversification Opportunities for CAPITAL and Dow Jones
Excellent diversification
The 3 months correlation between CAPITAL and Dow is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CAPITAL ONE FINL 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 CAPITAL 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 CAPITAL ONE FINL 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 CAPITAL i.e., CAPITAL and Dow Jones go up and down completely randomly.
Pair Corralation between CAPITAL and Dow Jones
Assuming the 90 days trading horizon CAPITAL is expected to generate 6.29 times less return on investment than Dow Jones. But when comparing it to its historical volatility, CAPITAL ONE FINL is 1.23 times less risky than Dow Jones. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
CAPITAL ONE FINL vs. Dow Jones Industrial
Performance |
| Timeline |
CAPITAL and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CAPITAL ONE FINL
Pair trading matchups for CAPITAL
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CAPITAL and Dow Jones
The main advantage of trading using opposite CAPITAL and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAPITAL 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.| CAPITAL vs. AEP TEX INC | CAPITAL vs. US BANK NATIONAL | CAPITAL vs. American Express | CAPITAL vs. Chevron Corp |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |