Correlation Between KBSTAR EURO and Dow Jones
Can any of the company-specific risk be diversified away by investing in both KBSTAR EURO 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 KBSTAR EURO and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR EURO STOXX and Dow Jones Industrial, you can compare the effects of market volatilities on KBSTAR EURO 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 KBSTAR EURO with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR EURO and Dow Jones.
Diversification Opportunities for KBSTAR EURO and Dow Jones
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBSTAR and Dow is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR EURO STOXX 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 KBSTAR EURO 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 KBSTAR EURO STOXX 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 KBSTAR EURO i.e., KBSTAR EURO and Dow Jones go up and down completely randomly.
Pair Corralation between KBSTAR EURO and Dow Jones
Assuming the 90 days trading horizon KBSTAR EURO STOXX is expected to under-perform the Dow Jones. But the etf apears to be less risky and, when comparing its historical volatility, KBSTAR EURO STOXX is 1.12 times less risky than Dow Jones. The etf trades about -0.07 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 291,093 from holding Dow Jones Industrial or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
KBSTAR EURO STOXX vs. Dow Jones Industrial
Performance |
| Timeline |
KBSTAR EURO and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
KBSTAR EURO STOXX
Pair trading matchups for KBSTAR EURO
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KBSTAR EURO and Dow Jones
The main advantage of trading using opposite KBSTAR EURO and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR EURO 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.| KBSTAR EURO vs. KBSTAR 200TR | KBSTAR EURO vs. KBSTAR HealthCare Fixed | KBSTAR EURO vs. KBSTAR Global Metaverse | KBSTAR EURO vs. KBSTAR Short Term IG |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |