Correlation Between Dow Jones and HUBBELL
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By analyzing existing cross correlation between Dow Jones Industrial and HUBBELL INC 35, you can compare the effects of market volatilities on Dow Jones and HUBBELL 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 Dow Jones with a short position of HUBBELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and HUBBELL.
Diversification Opportunities for Dow Jones and HUBBELL
Significant diversification
The 3 months correlation between Dow and HUBBELL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and HUBBELL INC 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUBBELL INC 35 and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with HUBBELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUBBELL INC 35 has no effect on the direction of Dow Jones i.e., Dow Jones and HUBBELL go up and down completely randomly.
Pair Corralation between Dow Jones and HUBBELL
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the HUBBELL. In addition to that, Dow Jones is 2.57 times more volatile than HUBBELL INC 35. It trades about -0.22 of its total potential returns per unit of risk. HUBBELL INC 35 is currently generating about -0.15 per unit of volatility. If you would invest 9,667 in HUBBELL INC 35 on October 11, 2024 and sell it today you would lose (86.00) from holding HUBBELL INC 35 or give up 0.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 90.91% |
Values | Daily Returns |
Dow Jones Industrial vs. HUBBELL INC 35
Performance |
Timeline |
Dow Jones and HUBBELL Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
HUBBELL INC 35
Pair trading matchups for HUBBELL
Pair Trading with Dow Jones and HUBBELL
The main advantage of trading using opposite Dow Jones and HUBBELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, HUBBELL 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 HUBBELL will offset losses from the drop in HUBBELL's long position.Dow Jones vs. Toro | Dow Jones vs. Foot Locker | Dow Jones vs. Abercrombie Fitch | Dow Jones vs. 51Talk Online Education |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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