Correlation Between Dow Jones and SOUTHERN
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By analyzing existing cross correlation between Dow Jones Industrial and SOUTHERN PER CORP, you can compare the effects of market volatilities on Dow Jones and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SOUTHERN.
Diversification Opportunities for Dow Jones and SOUTHERN
Good diversification
The 3 months correlation between Dow and SOUTHERN is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Dow Jones i.e., Dow Jones and SOUTHERN go up and down completely randomly.
Pair Corralation between Dow Jones and SOUTHERN
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.04 times more return on investment than SOUTHERN. However, Dow Jones is 2.04 times more volatile than SOUTHERN PER CORP. It trades about 0.07 of its potential returns per unit of risk. SOUTHERN PER CORP is currently generating about 0.0 per unit of risk. If you would invest 3,754,533 in Dow Jones Industrial on September 20, 2024 and sell it today you would earn a total of 478,154 from holding Dow Jones Industrial or generate 12.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Dow Jones Industrial vs. SOUTHERN PER CORP
Performance |
Timeline |
Dow Jones and SOUTHERN Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SOUTHERN PER CORP
Pair trading matchups for SOUTHERN
Pair Trading with Dow Jones and SOUTHERN
The main advantage of trading using opposite Dow Jones and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
SOUTHERN vs. Amgen Inc | SOUTHERN vs. Xponential Fitness | SOUTHERN vs. Valneva SE ADR | SOUTHERN vs. Centessa Pharmaceuticals PLC |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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