Correlation Between ENTERGY and Dow Jones
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By analyzing existing cross correlation between ENTERGY PORATION and Dow Jones Industrial, you can compare the effects of market volatilities on ENTERGY 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 ENTERGY with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTERGY and Dow Jones.
Diversification Opportunities for ENTERGY and Dow Jones
Modest diversification
The 3 months correlation between ENTERGY and Dow is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ENTERGY PORATION 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 ENTERGY 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 ENTERGY PORATION 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 ENTERGY i.e., ENTERGY and Dow Jones go up and down completely randomly.
Pair Corralation between ENTERGY and Dow Jones
Assuming the 90 days trading horizon ENTERGY is expected to generate 6.67 times less return on investment than Dow Jones. But when comparing it to its historical volatility, ENTERGY PORATION is 2.74 times less risky than Dow Jones. It trades about 0.05 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 Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
ENTERGY PORATION vs. Dow Jones Industrial
Performance |
| Timeline |
ENTERGY and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ENTERGY PORATION
Pair trading matchups for ENTERGY
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ENTERGY and Dow Jones
The main advantage of trading using opposite ENTERGY and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTERGY 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.| ENTERGY vs. AEP TEX INC | ENTERGY vs. US BANK NATIONAL | ENTERGY vs. International Business Machines | ENTERGY vs. Intel |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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