Correlation Between Dow Jones and Pfg American
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Pfg American 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 Pfg American 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 Pfg American Funds, you can compare the effects of market volatilities on Dow Jones and Pfg American 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 Pfg American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Pfg American.
Diversification Opportunities for Dow Jones and Pfg American
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Pfg is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Pfg American Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfg American 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 Pfg American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfg American Funds has no effect on the direction of Dow Jones i.e., Dow Jones and Pfg American go up and down completely randomly.
Pair Corralation between Dow Jones and Pfg American
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Pfg American. In addition to that, Dow Jones is 4.5 times more volatile than Pfg American Funds. It trades about -0.06 of its total potential returns per unit of risk. Pfg American Funds is currently generating about -0.02 per unit of volatility. If you would invest 957.00 in Pfg American Funds on January 10, 2025 and sell it today you would lose (5.00) from holding Pfg American Funds or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.03% |
| Values | Daily Returns |
Dow Jones Industrial vs. Pfg American Funds
Performance |
| Timeline |
Dow Jones and Pfg American Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pfg American Funds
Pair trading matchups for Pfg American
Pair Trading with Dow Jones and Pfg American
The main advantage of trading using opposite Dow Jones and Pfg American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Pfg American 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 Pfg American will offset losses from the drop in Pfg American's long position.| Dow Jones vs. Life Time Group | Dow Jones vs. Emerson Radio | Dow Jones vs. Eastern Co | Dow Jones vs. Mid Atlantic Home Health |
| Pfg American vs. T Rowe Price | Pfg American vs. Virtus Nfj Large Cap | Pfg American vs. Guidemark Large Cap | Pfg American vs. Large Cap Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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