Correlation Between Highway 50 and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Highway 50 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 Highway 50 and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway 50 Gold and Dow Jones Industrial, you can compare the effects of market volatilities on Highway 50 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 Highway 50 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway 50 and Dow Jones.
Diversification Opportunities for Highway 50 and Dow Jones
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highway and Dow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Highway 50 Gold 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 Highway 50 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 Highway 50 Gold 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 Highway 50 i.e., Highway 50 and Dow Jones go up and down completely randomly.
Pair Corralation between Highway 50 and Dow Jones
Assuming the 90 days horizon Highway 50 Gold is expected to generate 16.56 times more return on investment than Dow Jones. However, Highway 50 is 16.56 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of risk. If you would invest 26.00 in Highway 50 Gold on September 10, 2025 and sell it today you would earn a total of 24.00 from holding Highway 50 Gold or generate 92.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway 50 Gold vs. Dow Jones Industrial
Performance |
| Timeline |
Highway 50 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Highway 50 Gold
Pair trading matchups for Highway 50
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Highway 50 and Dow Jones
The main advantage of trading using opposite Highway 50 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway 50 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.| Highway 50 vs. Niocan Inc | Highway 50 vs. Tartisan Nickel Corp | Highway 50 vs. Erin Ventures | Highway 50 vs. Canadian Manganese |
| Dow Jones vs. Gladstone Investment | Dow Jones vs. Life Insurance | Dow Jones vs. Westshore Terminals Investment | Dow Jones vs. AG Mortgage Investment |
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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