Correlation Between SOUTHERN and Dow Jones
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By analyzing existing cross correlation between SOUTHERN PER CORP 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
Excellent diversification
The 3 months correlation between SOUTHERN and Dow is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN PER CORP 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 PER CORP 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 PER CORP is expected to generate 65.43 times more return on investment than Dow Jones. However, SOUTHERN is 65.43 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 10,608 in SOUTHERN PER CORP on September 2, 2024 and sell it today you would lose (1,405) from holding SOUTHERN PER CORP or give up 13.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.73% |
| Values | Daily Returns |
SOUTHERN PER CORP vs. Dow Jones Industrial
Performance |
| Timeline |
SOUTHERN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SOUTHERN PER CORP
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. Lindblad Expeditions Holdings | SOUTHERN vs. Saia Inc | SOUTHERN vs. LB Foster | SOUTHERN vs. Hafnia Limited |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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