Correlation Between Dow Jones and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Jhancock Multi-index 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 Jhancock Multi-index 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 Jhancock Multi Index 2065, you can compare the effects of market volatilities on Dow Jones and Jhancock Multi-index 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 Jhancock Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Jhancock Multi-index.
Diversification Opportunities for Dow Jones and Jhancock Multi-index
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Jhancock is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 Jhancock Multi-index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of Dow Jones i.e., Dow Jones and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between Dow Jones and Jhancock Multi-index
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.02 times more return on investment than Jhancock Multi-index. However, Dow Jones is 1.02 times more volatile than Jhancock Multi Index 2065. It trades about 0.16 of its potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.1 per unit of risk. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% 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. Jhancock Multi Index 2065
Performance |
| Timeline |
Dow Jones and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Jhancock Multi Index 2065
Pair trading matchups for Jhancock Multi-index
Pair Trading with Dow Jones and Jhancock Multi-index
The main advantage of trading using opposite Dow Jones and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Jhancock Multi-index 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 Jhancock Multi-index will offset losses from the drop in Jhancock Multi-index's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Jhancock Multi-index vs. Vanguard Target Retirement | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 |
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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