Correlation Between Dow Jones and WSFS Financial
Can any of the company-specific risk be diversified away by investing in both Dow Jones and WSFS Financial 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 Dow Jones and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and WSFS Financial, you can compare the effects of market volatilities on Dow Jones and WSFS Financial 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 WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and WSFS Financial.
Diversification Opportunities for Dow Jones and WSFS Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and WSFS is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial 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 WSFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSFS Financial has no effect on the direction of Dow Jones i.e., Dow Jones and WSFS Financial go up and down completely randomly.
Pair Corralation between Dow Jones and WSFS Financial
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.02 times less return on investment than WSFS Financial. But when comparing it to its historical volatility, Dow Jones Industrial is 1.93 times less risky than WSFS Financial. It trades about 0.25 of its potential returns per unit of risk. WSFS Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,199 in WSFS Financial on April 24, 2025 and sell it today you would earn a total of 624.00 from holding WSFS Financial or generate 12.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dow Jones Industrial vs. WSFS Financial
Performance |
Timeline |
Dow Jones and WSFS Financial Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
WSFS Financial
Pair trading matchups for WSFS Financial
Pair Trading with Dow Jones and WSFS Financial
The main advantage of trading using opposite Dow Jones and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, WSFS Financial 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 WSFS Financial will offset losses from the drop in WSFS Financial's long position.Dow Jones vs. Stereo Vision Entertainment | Dow Jones vs. Triton International Limited | Dow Jones vs. Loandepot | Dow Jones vs. Sonos Inc |
WSFS Financial vs. Northfield Bancorp | WSFS Financial vs. First Community | WSFS Financial vs. LINKBANCORP | WSFS Financial vs. FNB Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Commodity Directory Find actively traded commodities issued by global exchanges |