Correlation Between LOEWS and Dow Jones
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By analyzing existing cross correlation between LOEWS P 375 and Dow Jones Industrial, you can compare the effects of market volatilities on LOEWS 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 LOEWS with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOEWS and Dow Jones.
Diversification Opportunities for LOEWS and Dow Jones
Very good diversification
The 3 months correlation between LOEWS and Dow is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LOEWS P 375 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 LOEWS 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 LOEWS P 375 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 LOEWS i.e., LOEWS and Dow Jones go up and down completely randomly.
Pair Corralation between LOEWS and Dow Jones
Assuming the 90 days trading horizon LOEWS is expected to generate 70.25 times less return on investment than Dow Jones. But when comparing it to its historical volatility, LOEWS P 375 is 1.97 times less risky than Dow Jones. It trades about 0.0 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,394,710 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.95% |
| Values | Daily Returns |
LOEWS P 375 vs. Dow Jones Industrial
Performance |
| Timeline |
LOEWS and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
LOEWS P 375
Pair trading matchups for LOEWS
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with LOEWS and Dow Jones
The main advantage of trading using opposite LOEWS and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOEWS 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.| LOEWS vs. AEP TEX INC | LOEWS vs. US BANK NATIONAL | LOEWS vs. Eat Beyond Global | LOEWS vs. Charles Schwab Corp |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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