Correlation Between US Silica and Dow Jones
Can any of the company-specific risk be diversified away by investing in both US Silica 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 US Silica and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Silica Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on US Silica 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 US Silica with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Silica and Dow Jones.
Diversification Opportunities for US Silica and Dow Jones
Very good diversification
The 3 months correlation between SLCA and Dow is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding US Silica Holdings 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 US Silica 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 US Silica Holdings 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 US Silica i.e., US Silica and Dow Jones go up and down completely randomly.
Pair Corralation between US Silica and Dow Jones
If you would invest (100.00) in US Silica Holdings on September 19, 2024 and sell it today you would earn a total of 100.00 from holding US Silica Holdings or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
US Silica Holdings vs. Dow Jones Industrial
Performance |
Timeline |
US Silica and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
US Silica Holdings
Pair trading matchups for US Silica
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with US Silica and Dow Jones
The main advantage of trading using opposite US Silica and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Silica 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.US Silica vs. Newpark Resources | US Silica vs. North American Construction | US Silica vs. ProPetro Holding Corp | US Silica vs. Ranger Energy Services |
Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
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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