Correlation Between Dow Jones and Mfs Research
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mfs Research 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 Mfs Research 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 Mfs Research International, you can compare the effects of market volatilities on Dow Jones and Mfs Research 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 Mfs Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mfs Research.
Diversification Opportunities for Dow Jones and Mfs Research
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Mfs is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mfs Research International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research Interna 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 Mfs Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research Interna has no effect on the direction of Dow Jones i.e., Dow Jones and Mfs Research go up and down completely randomly.
Pair Corralation between Dow Jones and Mfs Research
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.32 times more return on investment than Mfs Research. However, Dow Jones is 1.32 times more volatile than Mfs Research International. It trades about 0.38 of its potential returns per unit of risk. Mfs Research International is currently generating about -0.08 per unit of risk. If you would invest 4,179,460 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 311,605 from holding Dow Jones Industrial or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mfs Research International
Performance |
| Timeline |
Dow Jones and Mfs Research Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mfs Research International
Pair trading matchups for Mfs Research
Pair Trading with Dow Jones and Mfs Research
The main advantage of trading using opposite Dow Jones and Mfs Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mfs Research 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 Mfs Research will offset losses from the drop in Mfs Research's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Mfs Research vs. Oklahoma College Savings | Mfs Research vs. Aqr Managed Futures | Mfs Research vs. Ab Bond Inflation | Mfs Research vs. Ab Bond Inflation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |