Correlation Between ENCANA and Dow Jones
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By analyzing existing cross correlation between ENCANA P 6625 and Dow Jones Industrial, you can compare the effects of market volatilities on ENCANA 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 ENCANA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCANA and Dow Jones.
Diversification Opportunities for ENCANA and Dow Jones
Very good diversification
The 3 months correlation between ENCANA and Dow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ENCANA P 6625 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 ENCANA 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 ENCANA P 6625 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 ENCANA i.e., ENCANA and Dow Jones go up and down completely randomly.
Pair Corralation between ENCANA and Dow Jones
Assuming the 90 days trading horizon ENCANA P 6625 is expected to generate 148.17 times more return on investment than Dow Jones. However, ENCANA is 148.17 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 9,840 in ENCANA P 6625 on August 28, 2024 and sell it today you would earn a total of 355.00 from holding ENCANA P 6625 or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.93% |
| Values | Daily Returns |
ENCANA P 6625 vs. Dow Jones Industrial
Performance |
| Timeline |
ENCANA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ENCANA P 6625
Pair trading matchups for ENCANA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ENCANA and Dow Jones
The main advantage of trading using opposite ENCANA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCANA 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.| ENCANA vs. The Coca Cola | ENCANA vs. JPMorgan Chase Co | ENCANA vs. Dupont De Nemours | ENCANA vs. Alcoa Corp |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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