Correlation Between Xtrackers Russell and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Xtrackers Russell 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 Xtrackers Russell and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Russell Multifactor and Dow Jones Industrial, you can compare the effects of market volatilities on Xtrackers Russell 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 Xtrackers Russell with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Russell and Dow Jones.
Diversification Opportunities for Xtrackers Russell and Dow Jones
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Xtrackers and Dow is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Russell Multifactor 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 Xtrackers Russell 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 Xtrackers Russell Multifactor 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 Xtrackers Russell i.e., Xtrackers Russell and Dow Jones go up and down completely randomly.
Pair Corralation between Xtrackers Russell and Dow Jones
Given the investment horizon of 90 days Xtrackers Russell Multifactor is expected to generate 0.92 times more return on investment than Dow Jones. However, Xtrackers Russell Multifactor is 1.09 times less risky than Dow Jones. It trades about 0.31 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 5,476 in Xtrackers Russell Multifactor on August 29, 2024 and sell it today you would earn a total of 343.00 from holding Xtrackers Russell Multifactor or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Russell Multifactor vs. Dow Jones Industrial
Performance |
| Timeline |
Xtrackers Russell and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Xtrackers Russell Multifactor
Pair trading matchups for Xtrackers Russell
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Xtrackers Russell and Dow Jones
The main advantage of trading using opposite Xtrackers Russell and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Russell 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.| Xtrackers Russell vs. Vanguard Mid Cap Index | Xtrackers Russell vs. iShares Core SP | Xtrackers Russell vs. SPDR SP MIDCAP | Xtrackers Russell vs. Vanguard SP Mid Cap |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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