Correlation Between Dow Jones and NBCUNIVERSAL
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By analyzing existing cross correlation between Dow Jones Industrial and NBCUNIVERSAL MEDIA LLC, you can compare the effects of market volatilities on Dow Jones and NBCUNIVERSAL 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 NBCUNIVERSAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NBCUNIVERSAL.
Diversification Opportunities for Dow Jones and NBCUNIVERSAL
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and NBCUNIVERSAL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NBCUNIVERSAL MEDIA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBCUNIVERSAL MEDIA LLC has no effect on the direction of Dow Jones i.e., Dow Jones and NBCUNIVERSAL go up and down completely randomly.
Pair Corralation between Dow Jones and NBCUNIVERSAL
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.45 times more return on investment than NBCUNIVERSAL. However, Dow Jones Industrial is 2.22 times less risky than NBCUNIVERSAL. It trades about -0.14 of its potential returns per unit of risk. NBCUNIVERSAL MEDIA LLC is currently generating about -0.07 per unit of risk. If you would invest 4,338,960 in Dow Jones Industrial on September 19, 2024 and sell it today you would lose (106,273) from holding Dow Jones Industrial or give up 2.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 54.55% |
Values | Daily Returns |
Dow Jones Industrial vs. NBCUNIVERSAL MEDIA LLC
Performance |
Timeline |
Dow Jones and NBCUNIVERSAL Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NBCUNIVERSAL MEDIA LLC
Pair trading matchups for NBCUNIVERSAL
Pair Trading with Dow Jones and NBCUNIVERSAL
The main advantage of trading using opposite Dow Jones and NBCUNIVERSAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, NBCUNIVERSAL 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 NBCUNIVERSAL will offset losses from the drop in NBCUNIVERSAL's long position.Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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