Correlation Between Dow Jones and Chase Growth
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Chase Growth 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 Dow Jones and Chase Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Chase Growth Fund, you can compare the effects of market volatilities on Dow Jones and Chase Growth 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 Dow Jones with a short position of Chase Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Chase Growth.
Diversification Opportunities for Dow Jones and Chase Growth
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Chase is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Chase Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chase Growth and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Chase Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chase Growth has no effect on the direction of Dow Jones i.e., Dow Jones and Chase Growth go up and down completely randomly.
Pair Corralation between Dow Jones and Chase Growth
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.93 times more return on investment than Chase Growth. However, Dow Jones Industrial is 1.08 times less risky than Chase Growth. It trades about 0.29 of its potential returns per unit of risk. Chase Growth Fund is currently generating about 0.25 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Chase Growth Fund
Performance |
| Timeline |
Dow Jones and Chase Growth Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Chase Growth Fund
Pair trading matchups for Chase Growth
Pair Trading with Dow Jones and Chase Growth
The main advantage of trading using opposite Dow Jones and Chase Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Chase Growth 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 Chase Growth will offset losses from the drop in Chase Growth's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| Chase Growth vs. Europacific Growth Fund | Chase Growth vs. Washington Mutual Investors | Chase Growth vs. Capital World Growth | Chase Growth vs. HUMANA INC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |