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Dow Industrials Return Rate vs. Natural Gas Prices Growth Rate
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DJIA Return Rate
Simultaneous Change
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DJIA Return Rate
Subsequent Change
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1% Rise in 1 Yr Natural Gas Prices Growth Rate
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1% Fall in 1 Yr Natural Gas Prices Growth Rate
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period, (from 5% to 6% for example) has typically been accompanied by a 0.04% Dow
Industrials Return Rate decline during that year and a 0.03% Dow Industrials Return
It also indicates that a 1% Natural Gas Prices Growth Rate decline over a 12 month
period, (from 5% to 4% for example) has typically been accompanied by a 0.03% Dow
Industrials Return Rate increase during that year and a 0.06% Dow Industrials Return
Rate decline the following year.
The center column shows the change in the Dow Industrials Return Rate over 12
months, depending on whether the period experienced a rising or falling Natural Gas
Prices Growth Rate. The right column shows the change in the Dow Industrials Return
Rate during the year following an increase or decrease in the Natural Gas Prices
Growth Rate.
The data history in the middle column shows no significant tendency for the
direction of the two rates to correlate. (They don't tend to move in the same
direction. They don't tend to move in opposite directions. The direction of
the rates seem to be unrelated to each other.)
The evidence for using the previous 12 month change in the Natural Gas
Prices Growth Rate to predict the future direction of the Dow Industrials
Return Rate is insignificant (right column).
Annual rates are shown in the graph and calculations.
How Do I Use This Information?
There are many investment theories that are well publicized in the financial press.
Even though little or no historical data may be offered as evidence for such theories,
many investors use them subconsciously, if not intentionally.
Example Theories: Rising Inflation is bad for the stock market. A booming housing
market is good for the S&P 500 stock index. A falling fed funds rate means that long
term interest rates will fall.
There are many such theories. In this site, long term investment and economic data
is tested against decades to determine whether a relationship actually exists or not.
This historical correlation provides a vital aid in interpreting the often confusing
behavior of the financial markets. The perspective gained may be the difference
between staying the course or being blown and tossed by every investment theory
that is popular at the moment. What the majority assumes to be true, often is not. In
the final analysis, readers are admonished to follow the evidence, wherever it leads.
This page tests the relationship between the Natural Gas Prices Growth Rate and the
Dow Industrials Return Rate. Suppose you are making a business or investment
decision. Suppose again that the decision hinges on whether the Natural Gas Prices
Growth Rate and the Dow Industrials Return Rate tend to move in the same or
opposite directions. The data, graphs, and analysis above will enlighten you. You'll
discover whether they move with, inversely to, or independently of each other.
Suppose that the Natural Gas Prices Growth Rate has risen sharply and that you
need to know what direction the Dow Industrials Return Rate is headed in the near
future. Does the recent increase in the Natural Gas Prices Growth Rate provide a
clue about the future direction of the Dow Industrials Return Rate? The data history,
graph, and analysis above will show you how the Dow Industrials Return Rate has
performed after increases in the Natural Gas Prices Growth Rate. You'll see if one
indicator has been likely to signal a change in another. This is not intended as a
prediction, but merely as a clue to the future from the annals of history. No man
knows the future, unless he has the ability to control the future.
This site compares data series for interest rates, stock indexes, economic indicators,
currency exchange rates and real estate values. Suppose that you want to see how
stock indexes are influenced by interest rates or the value of the dollar. Click one of
the stock index links on the right side of any page. Links to our multi-series graphs
and correlation analysis may be found at the bottom-center of the stock index pages.
Formula for periods with a rising Natural Gas Prices Growth Rate:
1) Change in the Dow Industrials Return Rate DURING periods with a rising Natural
Gas Prices Growth Rate:
The abbreviated formula is: (Dow Industrials Return Rate Change / Natural Gas
Prices Growth Rate Rise) x 1% = Published Rate.
The complete formula is: [(Average change in the Dow Industrials Return Rate over
all rolling 12 month periods with a rising Natural Gas Prices Growth Rate) / (Average
Rise in the Natural Gas Prices Growth Rate over the same 12 month periods)] x 1% =
Published Rate.
2) Change in the Dow Industrials Return Rate AFTER a rising Natural Gas Prices
Growth Rate:
The abbreviated formula is: (Subsequent Dow Industrials Return Rate Change /
Natural Gas Prices Growth Rate Rise) x 1% = Published Rate.
The complete formula is: [(Average change in the Dow Industrials Return Rate during
the 12 months following any rolling 12 month base period with a rising Natural Gas
Prices Growth Rate) / (Average Rise in the Natural Gas Prices Growth Rate over the
12 month base periods)] x 1% = Published Rate.
Formula for periods with a declining Natural Gas Prices Growth Rate:
1) Change in the Dow Industrials Return Rate DURING periods with a declining
Natural Gas Prices Growth Rate:
The abbreviated formula is: (Dow Industrials Return Rate Change / Natural Gas
Prices Growth Rate Decline) x -1% = Published Rate.
The complete formula is: [(Average change in the Dow Industrials Return Rate over
all rolling 12 month periods with a declining Natural Gas Prices Growth Rate) /
(Average decline in the Natural Gas Prices Growth Rate over the same 12 month
periods)] x -1% = Published Rate.
2) Change in the Dow Industrials Return Rate AFTER a decreasing Natural Gas
Prices Growth Rate:
The abbreviated formula is: (Subsequent Dow Industrials Return Rate Change /
Natural Gas Prices Growth Rate Decrease) x -1% = Published Rate.
The complete formula is: [(Average change in the Dow Industrials Return Rate during
the 12 months following any rolling 12 month base period with a declining Natural Gas
Prices Growth Rate) / (Average decline in the Natural Gas Prices Growth Rate over
the 12 month base periods)] x -1% = Published Rate.
Rolling 12 Month Periods Defined:
Overlapping 12 month periods in a monthly data base.
For example:
In the 24 month period included in 2000 - 2001, there are 13 complete rolling 12
month periods. The first is January, 2000 - December, 2000. The second is February,
2000 - January, 2001. The third is March, 2000 - February, 2001 and so on. The last
complete rolling 12 month period in the 2000 - 2001 period is January, 2001 -
December, 2001.
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