Correlation Between CSIF III and Dow Jones
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By analyzing existing cross correlation between CSIF III Equity and Dow Jones Industrial, you can compare the effects of market volatilities on CSIF III 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 CSIF III with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSIF III and Dow Jones.
Diversification Opportunities for CSIF III and Dow Jones
Very weak diversification
The 3 months correlation between CSIF and Dow is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CSIF III Equity 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 CSIF III 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 CSIF III Equity 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 CSIF III i.e., CSIF III and Dow Jones go up and down completely randomly.
Pair Corralation between CSIF III and Dow Jones
Assuming the 90 days trading horizon CSIF III Equity is expected to generate 1.15 times more return on investment than Dow Jones. However, CSIF III is 1.15 times more volatile than Dow Jones Industrial. It trades about -0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.19 per unit of risk. If you would invest 214,678 in CSIF III Equity on October 16, 2024 and sell it today you would lose (3,804) from holding CSIF III Equity or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.42% |
| Values | Daily Returns |
CSIF III Equity vs. Dow Jones Industrial
Performance |
| Timeline |
CSIF III and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CSIF III Equity
Pair trading matchups for CSIF III
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CSIF III and Dow Jones
The main advantage of trading using opposite CSIF III and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSIF III 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.The idea behind CSIF III Equity and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. LB Foster | Dow Jones vs. Definitive Healthcare Corp | Dow Jones vs. TFI International | Dow Jones vs. Ryanair Holdings PLC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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