Correlation Between Ventas and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ventas and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ventas and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ventas Inc and Dow Jones Industrial, you can compare the effects of market volatilities on Ventas 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 Ventas with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ventas and Dow Jones.
Diversification Opportunities for Ventas and Dow Jones
Weak diversification
The 3 months correlation between Ventas and Dow is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ventas Inc 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 Ventas 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 Ventas Inc 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 Ventas i.e., Ventas and Dow Jones go up and down completely randomly.
Pair Corralation between Ventas and Dow Jones
Considering the 90-day investment horizon Ventas Inc is expected to generate 2.12 times more return on investment than Dow Jones. However, Ventas is 2.12 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 4,858 in Ventas Inc on August 27, 2024 and sell it today you would earn a total of 1,497 from holding Ventas Inc or generate 30.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ventas Inc vs. Dow Jones Industrial
Performance |
| Timeline |
Ventas and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ventas Inc
Pair trading matchups for Ventas
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ventas and Dow Jones
The main advantage of trading using opposite Ventas and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ventas 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.| Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas vs. Global Medical REIT |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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