Correlation Between SOUTHERN and Dow Jones
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By analyzing existing cross correlation between SOUTHERN CALIFORNIA 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
Good diversification
The 3 months correlation between SOUTHERN and Dow is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIFORNIA 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 CALIFORNIA 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 CALIFORNIA EDISON is expected to under-perform the Dow Jones. In addition to that, SOUTHERN is 2.11 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 0.34 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 291,093 from holding Dow Jones Industrial or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.73% |
| Values | Daily Returns |
SOUTHERN CALIFORNIA EDISON vs. Dow Jones Industrial
Performance |
| Timeline |
SOUTHERN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SOUTHERN CALIFORNIA 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. ServiceNow | SOUTHERN vs. Grupo Simec SAB | SOUTHERN vs. Kaiser Aluminum | SOUTHERN vs. SmartStop Self Storage |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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