Correlation Between Rogers and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Rogers 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 Rogers and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers and Dow Jones Industrial, you can compare the effects of market volatilities on Rogers 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 Rogers with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers and Dow Jones.
Diversification Opportunities for Rogers and Dow Jones
Very good diversification
The 3 months correlation between Rogers and Dow is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Rogers 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 Rogers 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 Rogers 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 Rogers i.e., Rogers and Dow Jones go up and down completely randomly.
Pair Corralation between Rogers and Dow Jones
Considering the 90-day investment horizon Rogers is expected to under-perform the Dow Jones. In addition to that, Rogers is 2.88 times more volatile than Dow Jones Industrial. It trades about -0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,355,027 in Dow Jones Industrial on July 23, 2024 and sell it today you would earn a total of 972,564 from holding Dow Jones Industrial or generate 28.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Rogers vs. Dow Jones Industrial
Performance |
Timeline |
Rogers and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Rogers
Pair trading matchups for Rogers
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Rogers and Dow Jones
The main advantage of trading using opposite Rogers and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers 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.Rogers vs. Luxfer Holdings PLC | Rogers vs. Alto Ingredients | Rogers vs. Ryanair Holdings PLC | Rogers vs. Southwest Airlines |
Dow Jones vs. Abcellera Biologics | Dow Jones vs. MGIC Investment Corp | Dow Jones vs. Apogee Therapeutics, Common | Dow Jones vs. Old Republic International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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