Correlation Between Garda and Dow Jones
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By analyzing existing cross correlation between Garda World Security and Dow Jones Industrial, you can compare the effects of market volatilities on Garda 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 Garda with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda and Dow Jones.
Diversification Opportunities for Garda and Dow Jones
Very good diversification
The 3 months correlation between Garda and Dow is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Garda World Security 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 Garda 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 Garda World Security 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 Garda i.e., Garda and Dow Jones go up and down completely randomly.
Pair Corralation between Garda and Dow Jones
Assuming the 90 days trading horizon Garda World Security is expected to generate 134.64 times more return on investment than Dow Jones. However, Garda is 134.64 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 0.08 per unit of risk. If you would invest 9,600 in Garda World Security on September 2, 2024 and sell it today you would earn a total of 425.00 from holding Garda World Security or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.09% |
| Values | Daily Returns |
Garda World Security vs. Dow Jones Industrial
Performance |
| Timeline |
Garda and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Garda World Security
Pair trading matchups for Garda
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Garda and Dow Jones
The main advantage of trading using opposite Garda and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda 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.The idea behind Garda World Security and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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