Correlation Between PHINIA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both PHINIA 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 PHINIA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHINIA Inc and Dow Jones Industrial, you can compare the effects of market volatilities on PHINIA 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 PHINIA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHINIA and Dow Jones.
Diversification Opportunities for PHINIA and Dow Jones
Poor diversification
The 3 months correlation between PHINIA and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PHINIA 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 PHINIA 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 PHINIA 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 PHINIA i.e., PHINIA and Dow Jones go up and down completely randomly.
Pair Corralation between PHINIA and Dow Jones
Given the investment horizon of 90 days PHINIA Inc is expected to under-perform the Dow Jones. In addition to that, PHINIA is 2.71 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.04 per unit of volatility. If you would invest 4,290,695 in Dow Jones Industrial on December 21, 2024 and sell it today you would lose (95,363) from holding Dow Jones Industrial or give up 2.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.33% |
Values | Daily Returns |
PHINIA Inc vs. Dow Jones Industrial
Performance |
Timeline |
PHINIA and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
PHINIA Inc
Pair trading matchups for PHINIA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PHINIA and Dow Jones
The main advantage of trading using opposite PHINIA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHINIA 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.PHINIA vs. TRI Pointe Homes | PHINIA vs. Sysco | PHINIA vs. Autohome | PHINIA vs. Bassett Furniture Industries |
Dow Jones vs. Addus HomeCare | Dow Jones vs. United Microelectronics | Dow Jones vs. Columbia Sportswear | Dow Jones vs. Keurig Dr Pepper |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |