Correlation Between Dow Jones and Lennar
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By analyzing existing cross correlation between Dow Jones Industrial and Lennar 475 percent, you can compare the effects of market volatilities on Dow Jones and Lennar 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 Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Lennar.
Diversification Opportunities for Dow Jones and Lennar
Good diversification
The 3 months correlation between Dow and Lennar is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Lennar 475 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar 475 percent 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 Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar 475 percent has no effect on the direction of Dow Jones i.e., Dow Jones and Lennar go up and down completely randomly.
Pair Corralation between Dow Jones and Lennar
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.97 times more return on investment than Lennar. However, Dow Jones is 1.97 times more volatile than Lennar 475 percent. It trades about 0.04 of its potential returns per unit of risk. Lennar 475 percent is currently generating about -0.2 per unit of risk. If you would invest 4,220,822 in Dow Jones Industrial on September 24, 2024 and sell it today you would earn a total of 69,873 from holding Dow Jones Industrial or generate 1.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.38% |
Values | Daily Returns |
Dow Jones Industrial vs. Lennar 475 percent
Performance |
Timeline |
Dow Jones and Lennar Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Lennar 475 percent
Pair trading matchups for Lennar
Pair Trading with Dow Jones and Lennar
The main advantage of trading using opposite Dow Jones and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar'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 |
Lennar vs. Emerson Electric | Lennar vs. Cincinnati Financial | Lennar vs. Direct Line Insurance | Lennar vs. Park Ohio Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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