Correlation Between Dow Jones and Us Strategic
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Us Strategic 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 Us Strategic 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 Us Strategic Equity, you can compare the effects of market volatilities on Dow Jones and Us Strategic 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 Us Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Us Strategic.
Diversification Opportunities for Dow Jones and Us Strategic
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and RSEAX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Us Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Strategic Equity 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 Us Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Strategic Equity has no effect on the direction of Dow Jones i.e., Dow Jones and Us Strategic go up and down completely randomly.
Pair Corralation between Dow Jones and Us Strategic
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.22 times more return on investment than Us Strategic. However, Dow Jones is 1.22 times more volatile than Us Strategic Equity. It trades about 0.37 of its potential returns per unit of risk. Us Strategic Equity is currently generating about 0.37 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Us Strategic Equity
Performance |
| Timeline |
Dow Jones and Us Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Us Strategic Equity
Pair trading matchups for Us Strategic
Pair Trading with Dow Jones and Us Strategic
The main advantage of trading using opposite Dow Jones and Us Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Us Strategic 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 Us Strategic will offset losses from the drop in Us Strategic's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Us Strategic vs. International Developed Markets | Us Strategic vs. Global Real Estate | Us Strategic vs. Global Real Estate | Us Strategic vs. Growth Strategy 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |