Correlation Between Profunds Short and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Profunds Short 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 Profunds Short and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Short Bitcoin and Dow Jones Industrial, you can compare the effects of market volatilities on Profunds Short 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 Profunds Short with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Short and Dow Jones.
Diversification Opportunities for Profunds Short and Dow Jones
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Profunds and Dow is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Short Bitcoin 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 Profunds Short 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 Profunds Short Bitcoin 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 Profunds Short i.e., Profunds Short and Dow Jones go up and down completely randomly.
Pair Corralation between Profunds Short and Dow Jones
Assuming the 90 days horizon Profunds Short Bitcoin is expected to under-perform the Dow Jones. In addition to that, Profunds Short is 5.08 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 3,541,698 in Dow Jones Industrial on September 23, 2024 and sell it today you would earn a total of 742,328 from holding Dow Jones Industrial or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profunds Short Bitcoin vs. Dow Jones Industrial
Performance |
| Timeline |
Profunds Short and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Profunds Short Bitcoin
Pair trading matchups for Profunds Short
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Profunds Short and Dow Jones
The main advantage of trading using opposite Profunds Short and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds Short 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.| Profunds Short vs. Short Real Estate | Profunds Short vs. Short Real Estate | Profunds Short vs. Ultrashort Mid Cap Profund | Profunds Short vs. Ultrashort Mid Cap Profund |
| Dow Jones vs. Nok Airlines Public | Dow Jones vs. Alaska Air Group | Dow Jones vs. Universal Music Group | Dow Jones vs. Copa Holdings SA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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