Correlation Between Dow Jones and KSM Mutual
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By analyzing existing cross correlation between Dow Jones Industrial and KSM Mutual Funds, you can compare the effects of market volatilities on Dow Jones and KSM Mutual 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 KSM Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and KSM Mutual.
Diversification Opportunities for Dow Jones and KSM Mutual
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and KSM is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and KSM Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSM Mutual Funds 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 KSM Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSM Mutual Funds has no effect on the direction of Dow Jones i.e., Dow Jones and KSM Mutual go up and down completely randomly.
Pair Corralation between Dow Jones and KSM Mutual
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the KSM Mutual. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.45 times less risky than KSM Mutual. The index trades about -0.22 of its potential returns per unit of risk. The KSM Mutual Funds is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 565,300 in KSM Mutual Funds on November 27, 2024 and sell it today you would lose (5,600) from holding KSM Mutual Funds or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. KSM Mutual Funds
Performance |
| Timeline |
Dow Jones and KSM Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
KSM Mutual Funds
Pair trading matchups for KSM Mutual
Pair Trading with Dow Jones and KSM Mutual
The main advantage of trading using opposite Dow Jones and KSM Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, KSM Mutual 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 KSM Mutual will offset losses from the drop in KSM Mutual's long position.The idea behind Dow Jones Industrial and KSM Mutual Funds 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.| KSM Mutual vs. Harel Index Funds | KSM Mutual vs. Harel Index Funds | KSM Mutual vs. Harel Index Funds | KSM Mutual vs. Harel Index Funds |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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