Correlation Between Dow Jones and Locorr Strategic
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Locorr Strategic 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 Locorr Strategic 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 Locorr Strategic Allocation, you can compare the effects of market volatilities on Dow Jones and Locorr Strategic 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 Locorr Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Locorr Strategic.
Diversification Opportunities for Dow Jones and Locorr Strategic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Locorr is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Locorr Strategic Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Strategic All 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 Locorr Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Strategic All has no effect on the direction of Dow Jones i.e., Dow Jones and Locorr Strategic go up and down completely randomly.
Pair Corralation between Dow Jones and Locorr Strategic
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.51 times more return on investment than Locorr Strategic. However, Dow Jones is 1.51 times more volatile than Locorr Strategic Allocation. It trades about 0.18 of its potential returns per unit of risk. Locorr Strategic Allocation is currently generating about 0.17 per unit of risk. If you would invest 4,234,365 in Dow Jones Industrial on May 26, 2025 and sell it today you would earn a total of 328,809 from holding Dow Jones Industrial or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Locorr Strategic Allocation
Performance |
| Timeline |
Dow Jones and Locorr Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Locorr Strategic Allocation
Pair trading matchups for Locorr Strategic
Pair Trading with Dow Jones and Locorr Strategic
The main advantage of trading using opposite Dow Jones and Locorr Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Locorr Strategic 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 Locorr Strategic will offset losses from the drop in Locorr Strategic's long position.| Dow Jones vs. NetSol Technologies | Dow Jones vs. Sprinklr | Dow Jones vs. Willis Lease Finance | Dow Jones vs. Joint Stock |
| Locorr Strategic vs. The Emerging Markets | Locorr Strategic vs. Franklin Emerging Market | Locorr Strategic vs. Balanced Strategy Fund | Locorr Strategic vs. Rbc Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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