Correlation Between SPECTRA and Dow Jones
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By analyzing existing cross correlation between SPECTRA ENERGY PARTNERS and Dow Jones Industrial, you can compare the effects of market volatilities on SPECTRA 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 SPECTRA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPECTRA and Dow Jones.
Diversification Opportunities for SPECTRA and Dow Jones
Significant diversification
The 3 months correlation between SPECTRA and Dow is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRA ENERGY PARTNERS 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 SPECTRA 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 SPECTRA ENERGY PARTNERS 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 SPECTRA i.e., SPECTRA and Dow Jones go up and down completely randomly.
Pair Corralation between SPECTRA and Dow Jones
Assuming the 90 days trading horizon SPECTRA is expected to generate 14.26 times less return on investment than Dow Jones. But when comparing it to its historical volatility, SPECTRA ENERGY PARTNERS is 2.83 times less risky than Dow Jones. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,378,148 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 1,107,883 from holding Dow Jones Industrial or generate 32.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.96% |
| Values | Daily Returns |
SPECTRA ENERGY PARTNERS vs. Dow Jones Industrial
Performance |
| Timeline |
SPECTRA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SPECTRA ENERGY PARTNERS
Pair trading matchups for SPECTRA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SPECTRA and Dow Jones
The main advantage of trading using opposite SPECTRA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPECTRA 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.| SPECTRA vs. AEP TEX INC | SPECTRA vs. US BANK NATIONAL | SPECTRA vs. Dupont De Nemours | SPECTRA vs. The Travelers Companies |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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