Correlation Between Dow Jones and Energy Focu
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Energy Focu 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 Energy Focu 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 Energy Focu, you can compare the effects of market volatilities on Dow Jones and Energy Focu 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 Energy Focu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Energy Focu.
Diversification Opportunities for Dow Jones and Energy Focu
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Energy is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Energy Focu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Focu 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 Energy Focu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Focu has no effect on the direction of Dow Jones i.e., Dow Jones and Energy Focu go up and down completely randomly.
Pair Corralation between Dow Jones and Energy Focu
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.14 times more return on investment than Energy Focu. However, Dow Jones Industrial is 7.14 times less risky than Energy Focu. It trades about 0.03 of its potential returns per unit of risk. Energy Focu is currently generating about 0.0 per unit of risk. If you would invest 4,563,174 in Dow Jones Industrial on August 22, 2025 and sell it today you would earn a total of 50,703 from holding Dow Jones Industrial or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Energy Focu
Performance |
| Timeline |
Dow Jones and Energy Focu Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Energy Focu
Pair trading matchups for Energy Focu
Pair Trading with Dow Jones and Energy Focu
The main advantage of trading using opposite Dow Jones and Energy Focu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Energy Focu 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 Energy Focu will offset losses from the drop in Energy Focu's long position.| Dow Jones vs. JD Sports Fashion | Dow Jones vs. JD Sports Fashion | Dow Jones vs. Starwin Media Holdings | Dow Jones vs. Logansport Financial Corp |
| Energy Focu vs. Yunhong Green CTI | Energy Focu vs. Premium Catering Limited | Energy Focu vs. Rent the Runway | Energy Focu vs. Good Times Restaurants |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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