Correlation Between Series Portfolios and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Series Portfolios 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 Series Portfolios and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Series Portfolios Trust and Dow Jones Industrial, you can compare the effects of market volatilities on Series Portfolios 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 Series Portfolios with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Series Portfolios and Dow Jones.
Diversification Opportunities for Series Portfolios and Dow Jones
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Series and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Series Portfolios Trust 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 Series Portfolios 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 Series Portfolios Trust 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 Series Portfolios i.e., Series Portfolios and Dow Jones go up and down completely randomly.
Pair Corralation between Series Portfolios and Dow Jones
Given the investment horizon of 90 days Series Portfolios is expected to generate 8.54 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Series Portfolios Trust is 14.93 times less risky than Dow Jones. It trades about 0.65 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Series Portfolios Trust vs. Dow Jones Industrial
Performance |
| Timeline |
Series Portfolios and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Series Portfolios Trust
Pair trading matchups for Series Portfolios
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Series Portfolios and Dow Jones
The main advantage of trading using opposite Series Portfolios and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Series Portfolios 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.| Series Portfolios vs. iShares Interest Rate | Series Portfolios vs. iShares Interest Rate | Series Portfolios vs. iShares Edge Investment | Series Portfolios vs. iShares Inflation Hedged |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Correlations Find global opportunities by holding instruments from different markets |