Correlation Between COMMONWEALTH and Dow Jones
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By analyzing existing cross correlation between COMMONWEALTH EDISON 645 and Dow Jones Industrial, you can compare the effects of market volatilities on COMMONWEALTH 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 COMMONWEALTH with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMONWEALTH and Dow Jones.
Diversification Opportunities for COMMONWEALTH and Dow Jones
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMMONWEALTH and Dow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding COMMONWEALTH EDISON 645 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 COMMONWEALTH 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 COMMONWEALTH EDISON 645 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 COMMONWEALTH i.e., COMMONWEALTH and Dow Jones go up and down completely randomly.
Pair Corralation between COMMONWEALTH and Dow Jones
Assuming the 90 days trading horizon COMMONWEALTH is expected to generate 7.11 times less return on investment than Dow Jones. In addition to that, COMMONWEALTH is 1.66 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.13 per unit of volatility. If you would invest 3,611,738 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 879,327 from holding Dow Jones Industrial or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.73% |
| Values | Daily Returns |
COMMONWEALTH EDISON 645 vs. Dow Jones Industrial
Performance |
| Timeline |
COMMONWEALTH and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
COMMONWEALTH EDISON 645
Pair trading matchups for COMMONWEALTH
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with COMMONWEALTH and Dow Jones
The main advantage of trading using opposite COMMONWEALTH and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMONWEALTH 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.| COMMONWEALTH vs. Nyxoah | COMMONWEALTH vs. Cumberland Pharmaceuticals | COMMONWEALTH vs. Viemed Healthcare | COMMONWEALTH vs. Amgen Inc |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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