Correlation Between Dow Jones and Muzinich
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Muzinich 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 Muzinich 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 Muzinich High Yield, you can compare the effects of market volatilities on Dow Jones and Muzinich 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 Muzinich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Muzinich.
Diversification Opportunities for Dow Jones and Muzinich
Poor diversification
The 3 months correlation between Dow and Muzinich is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Muzinich High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muzinich High Yield 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 Muzinich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muzinich High Yield has no effect on the direction of Dow Jones i.e., Dow Jones and Muzinich go up and down completely randomly.
Pair Corralation between Dow Jones and Muzinich
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 5.32 times more return on investment than Muzinich. However, Dow Jones is 5.32 times more volatile than Muzinich High Yield. It trades about 0.16 of its potential returns per unit of risk. Muzinich High Yield is currently generating about 0.25 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dow Jones Industrial vs. Muzinich High Yield
Performance |
| Timeline |
Dow Jones and Muzinich Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Muzinich High Yield
Pair trading matchups for Muzinich
Pair Trading with Dow Jones and Muzinich
The main advantage of trading using opposite Dow Jones and Muzinich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Muzinich 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 Muzinich will offset losses from the drop in Muzinich's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Muzinich vs. Muzinich Credit Opportunities | Muzinich vs. Muzinich Low Duration | Muzinich vs. Fidelity Advisor Balanced | Muzinich vs. Schwab Sp 500 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |