Correlation Between Dow Jones and Multi-manager Global
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Multi-manager Global 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 Multi-manager Global 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 Multi Manager Global Real, you can compare the effects of market volatilities on Dow Jones and Multi-manager Global 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 Multi-manager Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Multi-manager Global.
Diversification Opportunities for Dow Jones and Multi-manager Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Multi-manager is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Multi Manager Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Global 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 Multi-manager Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Global has no effect on the direction of Dow Jones i.e., Dow Jones and Multi-manager Global go up and down completely randomly.
Pair Corralation between Dow Jones and Multi-manager Global
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.75 times more return on investment than Multi-manager Global. However, Dow Jones Industrial is 1.34 times less risky than Multi-manager Global. It trades about 0.08 of its potential returns per unit of risk. Multi Manager Global Real is currently generating about 0.03 per unit of risk. If you would invest 3,418,997 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,072,068 from holding Dow Jones Industrial or generate 31.36% 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. Multi Manager Global Real
Performance |
| Timeline |
Dow Jones and Multi-manager Global Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Multi Manager Global Real
Pair trading matchups for Multi-manager Global
Pair Trading with Dow Jones and Multi-manager Global
The main advantage of trading using opposite Dow Jones and Multi-manager Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Multi-manager Global 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 Multi-manager Global will offset losses from the drop in Multi-manager Global's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Multi-manager Global vs. Dfa Global Real | Multi-manager Global vs. Vanguard Global Ex Us | Multi-manager Global vs. Global Real Estate | Multi-manager Global vs. Global Real Estate |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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