Correlation Between NATIONAL and Dow Jones
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By analyzing existing cross correlation between NATIONAL RURAL UTILS and Dow Jones Industrial, you can compare the effects of market volatilities on NATIONAL 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 NATIONAL with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL and Dow Jones.
Diversification Opportunities for NATIONAL and Dow Jones
Excellent diversification
The 3 months correlation between NATIONAL and Dow is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL RURAL UTILS 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 NATIONAL 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 NATIONAL RURAL UTILS 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 NATIONAL i.e., NATIONAL and Dow Jones go up and down completely randomly.
Pair Corralation between NATIONAL and Dow Jones
Assuming the 90 days trading horizon NATIONAL RURAL UTILS is expected to generate 124.91 times more return on investment than Dow Jones. However, NATIONAL is 124.91 times more volatile than Dow Jones Industrial. It trades about 0.08 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 8,650 in NATIONAL RURAL UTILS on August 29, 2024 and sell it today you would lose (226.00) from holding NATIONAL RURAL UTILS or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.5% |
| Values | Daily Returns |
NATIONAL RURAL UTILS vs. Dow Jones Industrial
Performance |
| Timeline |
NATIONAL and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
NATIONAL RURAL UTILS
Pair trading matchups for NATIONAL
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NATIONAL and Dow Jones
The main advantage of trading using opposite NATIONAL and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL 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.| NATIONAL vs. HE Equipment Services | NATIONAL vs. First Ship Lease | NATIONAL vs. Assurant | NATIONAL vs. Air Lease |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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