Correlation Between Dow Jones and CoreShares
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By analyzing existing cross correlation between Dow Jones Industrial and CoreShares SP Global, you can compare the effects of market volatilities on Dow Jones and CoreShares 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 CoreShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CoreShares.
Diversification Opportunities for Dow Jones and CoreShares
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and CoreShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CoreShares SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares SP Global 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 CoreShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares SP Global has no effect on the direction of Dow Jones i.e., Dow Jones and CoreShares go up and down completely randomly.
Pair Corralation between Dow Jones and CoreShares
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.97 times more return on investment than CoreShares. However, Dow Jones Industrial is 1.03 times less risky than CoreShares. It trades about 0.18 of its potential returns per unit of risk. CoreShares SP Global is currently generating about 0.04 per unit of risk. If you would invest 4,109,142 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 376,889 from holding Dow Jones Industrial or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. CoreShares SP Global
Performance |
| Timeline |
Dow Jones and CoreShares Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CoreShares SP Global
Pair trading matchups for CoreShares
Pair Trading with Dow Jones and CoreShares
The main advantage of trading using opposite Dow Jones and CoreShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, CoreShares 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 CoreShares will offset losses from the drop in CoreShares' 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 |
| CoreShares vs. CoreShares SP 500 | CoreShares vs. CoreShares Income AMETF | CoreShares vs. CoreShares Preference Share | CoreShares vs. CoreShares Yield Selected |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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