Correlation Between Dow Jones and Mfs Variable
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mfs Variable 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 Variable 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 Variable Insurance, you can compare the effects of market volatilities on Dow Jones and Mfs Variable 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 Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mfs Variable.
Diversification Opportunities for Dow Jones and Mfs Variable
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Mfs is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mfs Variable Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Variable Insurance 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 Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Variable Insurance has no effect on the direction of Dow Jones i.e., Dow Jones and Mfs Variable go up and down completely randomly.
Pair Corralation between Dow Jones and Mfs Variable
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.04 times more return on investment than Mfs Variable. However, Dow Jones is 1.04 times more volatile than Mfs Variable Insurance. It trades about 0.22 of its potential returns per unit of risk. Mfs Variable Insurance is currently generating about 0.05 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 190,894 from holding Dow Jones Industrial or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mfs Variable Insurance
Performance |
| Timeline |
Dow Jones and Mfs Variable Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mfs Variable Insurance
Pair trading matchups for Mfs Variable
Pair Trading with Dow Jones and Mfs Variable
The main advantage of trading using opposite Dow Jones and Mfs Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mfs Variable 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 Variable will offset losses from the drop in Mfs Variable's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| Mfs Variable vs. Realty Income | Mfs Variable vs. Dynex Capital | Mfs Variable vs. First Industrial Realty | Mfs Variable vs. Healthcare Realty Trust |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |