Correlation Between SELECT and Dow Jones
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By analyzing existing cross correlation between SELECT INCOME REIT and Dow Jones Industrial, you can compare the effects of market volatilities on SELECT 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 SELECT with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SELECT and Dow Jones.
Diversification Opportunities for SELECT and Dow Jones
Very weak diversification
The 3 months correlation between SELECT and Dow is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SELECT INCOME REIT 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 SELECT 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 SELECT INCOME REIT 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 SELECT i.e., SELECT and Dow Jones go up and down completely randomly.
Pair Corralation between SELECT and Dow Jones
Assuming the 90 days trading horizon SELECT INCOME REIT is expected to under-perform the Dow Jones. In addition to that, SELECT is 6.98 times more volatile than Dow Jones Industrial. It trades about -0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of volatility. If you would invest 4,290,695 in Dow Jones Industrial on October 24, 2024 and sell it today you would earn a total of 111,886 from holding Dow Jones Industrial or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
SELECT INCOME REIT vs. Dow Jones Industrial
Performance |
| Timeline |
SELECT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SELECT INCOME REIT
Pair trading matchups for SELECT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SELECT and Dow Jones
The main advantage of trading using opposite SELECT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SELECT 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.| SELECT vs. SNDL Inc | SELECT vs. Vantage Drilling International | SELECT vs. Cabo Drilling Corp | SELECT vs. Ambev SA ADR |
| Dow Jones vs. Transocean | Dow Jones vs. Noble plc | Dow Jones vs. Evolution Gaming Group | Dow Jones vs. Addus HomeCare |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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