Correlation Between Dow Jones and Hawkins
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Hawkins 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 Hawkins 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 Hawkins, you can compare the effects of market volatilities on Dow Jones and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Hawkins.
Diversification Opportunities for Dow Jones and Hawkins
Excellent diversification
The 3 months correlation between Dow and Hawkins is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Dow Jones i.e., Dow Jones and Hawkins go up and down completely randomly.
Pair Corralation between Dow Jones and Hawkins
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.23 times more return on investment than Hawkins. However, Dow Jones Industrial is 4.32 times less risky than Hawkins. It trades about 0.2 of its potential returns per unit of risk. Hawkins is currently generating about -0.23 per unit of risk. If you would invest 4,588,345 in Dow Jones Industrial on August 14, 2025 and sell it today you would earn a total of 237,137 from holding Dow Jones Industrial or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Hawkins
Performance |
| Timeline |
Dow Jones and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Hawkins
Pair trading matchups for Hawkins
Pair Trading with Dow Jones and Hawkins
The main advantage of trading using opposite Dow Jones and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Dow Jones vs. IBITX Software | Dow Jones vs. United Internet AG | Dow Jones vs. Unity Software | Dow Jones vs. 1mage Software |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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