Correlation Between SOUTHERN and Dow Jones
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and Dow Jones Industrial, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Dow Jones.
Diversification Opportunities for SOUTHERN and Dow Jones
Very good diversification
The 3 months correlation between SOUTHERN and Dow is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON 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 SOUTHERN 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 SOUTHERN CALIF EDISON 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 SOUTHERN i.e., SOUTHERN and Dow Jones go up and down completely randomly.
Pair Corralation between SOUTHERN and Dow Jones
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to generate 1.16 times more return on investment than Dow Jones. However, SOUTHERN is 1.16 times more volatile than Dow Jones Industrial. It trades about 0.39 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.02 per unit of risk. If you would invest 7,530 in SOUTHERN CALIF EDISON on September 10, 2024 and sell it today you would earn a total of 309.00 from holding SOUTHERN CALIF EDISON or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. Dow Jones Industrial
Performance |
| Timeline |
SOUTHERN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SOUTHERN CALIF EDISON
Pair trading matchups for SOUTHERN
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SOUTHERN and Dow Jones
The main advantage of trading using opposite SOUTHERN and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.| SOUTHERN vs. Southwest Airlines | SOUTHERN vs. Canlan Ice Sports | SOUTHERN vs. Lindblad Expeditions Holdings | SOUTHERN vs. Coty Inc |
| Dow Jones vs. SEI Investments | Dow Jones vs. Morgan Stanley | Dow Jones vs. CDW Corp | Dow Jones vs. Independence Realty Trust |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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