Correlation Between Dow Jones and Beta ETF
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By analyzing existing cross correlation between Dow Jones Industrial and Beta ETF WIG20Short, you can compare the effects of market volatilities on Dow Jones and Beta ETF 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 Beta ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Beta ETF.
Diversification Opportunities for Dow Jones and Beta ETF
Very weak diversification
The 3 months correlation between Dow and Beta is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Beta ETF WIG20Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta ETF WIG20Short 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 Beta ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta ETF WIG20Short has no effect on the direction of Dow Jones i.e., Dow Jones and Beta ETF go up and down completely randomly.
Pair Corralation between Dow Jones and Beta ETF
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.61 times more return on investment than Beta ETF. However, Dow Jones Industrial is 1.64 times less risky than Beta ETF. It trades about 0.27 of its potential returns per unit of risk. Beta ETF WIG20Short is currently generating about 0.09 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. Beta ETF WIG20Short
Performance |
| Timeline |
Dow Jones and Beta ETF Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Beta ETF WIG20Short
Pair trading matchups for Beta ETF
Pair Trading with Dow Jones and Beta ETF
The main advantage of trading using opposite Dow Jones and Beta ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Beta ETF 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 Beta ETF will offset losses from the drop in Beta ETF's long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| Beta ETF vs. Asseco Business Solutions | Beta ETF vs. Detalion Games SA | Beta ETF vs. Asseco South Eastern | Beta ETF vs. CFI Holding 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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