Correlation Between TARGET and Dow Jones
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By analyzing existing cross correlation between TARGET P 65 and Dow Jones Industrial, you can compare the effects of market volatilities on TARGET 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 TARGET with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TARGET and Dow Jones.
Diversification Opportunities for TARGET and Dow Jones
Very poor diversification
The 3 months correlation between TARGET and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TARGET P 65 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 TARGET 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 TARGET P 65 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 TARGET i.e., TARGET and Dow Jones go up and down completely randomly.
Pair Corralation between TARGET and Dow Jones
Assuming the 90 days trading horizon TARGET is expected to generate 1.07 times less return on investment than Dow Jones. In addition to that, TARGET is 1.73 times more volatile than Dow Jones Industrial. It trades about 0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 3,533,347 in Dow Jones Industrial on October 21, 2024 and sell it today you would earn a total of 815,436 from holding Dow Jones Industrial or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 37.02% |
| Values | Daily Returns |
TARGET P 65 vs. Dow Jones Industrial
Performance |
| Timeline |
TARGET and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
TARGET P 65
Pair trading matchups for TARGET
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TARGET and Dow Jones
The main advantage of trading using opposite TARGET and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TARGET 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.| TARGET vs. Brandywine Realty Trust | TARGET vs. Keurig Dr Pepper | TARGET vs. Visteon Corp | TARGET vs. Vita Coco |
| Dow Jones vs. Ainsworth Game Technology | Dow Jones vs. The Coca Cola | Dow Jones vs. Galaxy Gaming | Dow Jones vs. Playtika Holding Corp |
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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