Correlation Between LOWES and Dow Jones
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By analyzing existing cross correlation between LOWES INC 37 and Dow Jones Industrial, you can compare the effects of market volatilities on LOWES 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 LOWES with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOWES and Dow Jones.
Diversification Opportunities for LOWES and Dow Jones
Excellent diversification
The 3 months correlation between LOWES and Dow is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LOWES INC 37 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 LOWES 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 LOWES INC 37 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 LOWES i.e., LOWES and Dow Jones go up and down completely randomly.
Pair Corralation between LOWES and Dow Jones
Assuming the 90 days trading horizon LOWES INC 37 is expected to under-perform the Dow Jones. In addition to that, LOWES is 1.12 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 4,306,522 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 118,261 from holding Dow Jones Industrial or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
LOWES INC 37 vs. Dow Jones Industrial
Performance |
| Timeline |
LOWES and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
LOWES INC 37
Pair trading matchups for LOWES
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with LOWES and Dow Jones
The main advantage of trading using opposite LOWES and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOWES 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 LOWES INC 37 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. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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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