Correlation Between Dow Jones and BAKER
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By analyzing existing cross correlation between Dow Jones Industrial and BAKER HUGHES A, you can compare the effects of market volatilities on Dow Jones and BAKER 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 BAKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and BAKER.
Diversification Opportunities for Dow Jones and BAKER
Very good diversification
The 3 months correlation between Dow and BAKER is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Dow Jones i.e., Dow Jones and BAKER go up and down completely randomly.
Pair Corralation between Dow Jones and BAKER
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.76 times more return on investment than BAKER. However, Dow Jones Industrial is 1.32 times less risky than BAKER. It trades about 0.08 of its potential returns per unit of risk. BAKER HUGHES A is currently generating about -0.01 per unit of risk. If you would invest 3,768,954 in Dow Jones Industrial on September 24, 2024 and sell it today you would earn a total of 515,072 from holding Dow Jones Industrial or generate 13.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 84.68% |
Values | Daily Returns |
Dow Jones Industrial vs. BAKER HUGHES A
Performance |
Timeline |
Dow Jones and BAKER Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
BAKER HUGHES A
Pair trading matchups for BAKER
Pair Trading with Dow Jones and BAKER
The main advantage of trading using opposite Dow Jones and BAKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, BAKER 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 BAKER will offset losses from the drop in BAKER's long position.Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
BAKER vs. AEP TEX INC | BAKER vs. US BANK NATIONAL | BAKER vs. Brightsphere Investment Group | BAKER vs. Neurocrine Biosciences |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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