Correlation Between PRAXAIR and Dow Jones
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By analyzing existing cross correlation between PRAXAIR INC 355 and Dow Jones Industrial, you can compare the effects of market volatilities on PRAXAIR 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 PRAXAIR with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRAXAIR and Dow Jones.
Diversification Opportunities for PRAXAIR and Dow Jones
Modest diversification
The 3 months correlation between PRAXAIR and Dow is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PRAXAIR INC 355 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 PRAXAIR 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 PRAXAIR INC 355 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 PRAXAIR i.e., PRAXAIR and Dow Jones go up and down completely randomly.
Pair Corralation between PRAXAIR and Dow Jones
Assuming the 90 days trading horizon PRAXAIR INC 355 is expected to generate 1.51 times more return on investment than Dow Jones. However, PRAXAIR is 1.51 times more volatile than Dow Jones Industrial. It trades about 0.17 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 8,122 in PRAXAIR INC 355 on August 25, 2024 and sell it today you would earn a total of 252.00 from holding PRAXAIR INC 355 or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.09% |
| Values | Daily Returns |
PRAXAIR INC 355 vs. Dow Jones Industrial
Performance |
| Timeline |
PRAXAIR and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
PRAXAIR INC 355
Pair trading matchups for PRAXAIR
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PRAXAIR and Dow Jones
The main advantage of trading using opposite PRAXAIR and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PRAXAIR 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.| PRAXAIR vs. The Coca Cola | PRAXAIR vs. JPMorgan Chase Co | PRAXAIR vs. Dupont De Nemours | PRAXAIR vs. Alcoa Corp |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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