Correlation Between Dow Jones and INAQ Old
Can any of the company-specific risk be diversified away by investing in both Dow Jones and INAQ Old 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 INAQ Old 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 INAQ Old, you can compare the effects of market volatilities on Dow Jones and INAQ Old 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 INAQ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and INAQ Old.
Diversification Opportunities for Dow Jones and INAQ Old
Average diversification
The 3 months correlation between Dow and INAQ is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and INAQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INAQ Old 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 INAQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INAQ Old has no effect on the direction of Dow Jones i.e., Dow Jones and INAQ Old go up and down completely randomly.
Pair Corralation between Dow Jones and INAQ Old
If you would invest 4,270,656 in Dow Jones Industrial on November 5, 2024 and sell it today you would earn a total of 183,810 from holding Dow Jones Industrial or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Dow Jones Industrial vs. INAQ Old
Performance |
| Timeline |
Dow Jones and INAQ Old Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
INAQ Old
Pair trading matchups for INAQ Old
Pair Trading with Dow Jones and INAQ Old
The main advantage of trading using opposite Dow Jones and INAQ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, INAQ Old 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 INAQ Old will offset losses from the drop in INAQ Old's long position.The idea behind Dow Jones Industrial and INAQ Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |