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
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and KSM is 0.8. 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 is expected to generate 1.05 times less return on investment than KSM Mutual. But when comparing it to its historical volatility, Dow Jones Industrial is 1.49 times less risky than KSM Mutual. It trades about 0.15 of its potential returns per unit of risk. KSM Mutual Funds is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 313,200 in KSM Mutual Funds on September 1, 2024 and sell it today you would earn a total of 76,500 from holding KSM Mutual Funds or generate 24.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.32% |
| 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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