Correlation Between Macq Kor and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Macq Kor 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 Macq Kor and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macq Kor Infr and Dow Jones Industrial, you can compare the effects of market volatilities on Macq Kor 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 Macq Kor with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macq Kor and Dow Jones.
Diversification Opportunities for Macq Kor and Dow Jones
Pay attention - limited upside
The 3 months correlation between Macq and Dow is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Macq Kor Infr 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 Macq Kor 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 Macq Kor Infr 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 Macq Kor i.e., Macq Kor and Dow Jones go up and down completely randomly.
Pair Corralation between Macq Kor and Dow Jones
Assuming the 90 days trading horizon Macq Kor Infr is expected to under-perform the Dow Jones. But the etf apears to be less risky and, when comparing its historical volatility, Macq Kor Infr is 1.06 times less risky than Dow Jones. The etf trades about -0.01 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,409,586 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 1,081,479 from holding Dow Jones Industrial or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.4% |
| Values | Daily Returns |
Macq Kor Infr vs. Dow Jones Industrial
Performance |
| Timeline |
Macq Kor and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Macq Kor Infr
Pair trading matchups for Macq Kor
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Macq Kor and Dow Jones
The main advantage of trading using opposite Macq Kor and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macq Kor 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.| Macq Kor vs. KODEX 200LONGKOSDAQ150SHORT Futures | Macq Kor vs. ACE KRX Physical | Macq Kor vs. SOL KRX Climate | Macq Kor vs. MiraeAsset TIGER Quality |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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