Correlation Between Frost Total and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Frost Total 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 Frost Total and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Total Return and Dow Jones Industrial, you can compare the effects of market volatilities on Frost Total 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 Frost Total with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Total and Dow Jones.
Diversification Opportunities for Frost Total and Dow Jones
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Frost and Dow is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Frost Total Return 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 Frost Total 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 Frost Total Return 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 Frost Total i.e., Frost Total and Dow Jones go up and down completely randomly.
Pair Corralation between Frost Total and Dow Jones
Assuming the 90 days horizon Frost Total Return is expected to generate 0.29 times more return on investment than Dow Jones. However, Frost Total Return is 3.42 times less risky than Dow Jones. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.03 per unit of risk. If you would invest 957.00 in Frost Total Return on December 27, 2024 and sell it today you would earn a total of 20.00 from holding Frost Total Return or generate 2.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Frost Total Return vs. Dow Jones Industrial
Performance |
Timeline |
Frost Total and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Frost Total Return
Pair trading matchups for Frost Total
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Frost Total and Dow Jones
The main advantage of trading using opposite Frost Total and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Total 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.Frost Total vs. Qs Global Equity | Frost Total vs. Barings Global Floating | Frost Total vs. Touchstone Large Cap | Frost Total vs. Guidemark Large Cap |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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