Correlation Between Dow Jones and Siit World
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Siit World 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 Siit World 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 Siit World Select, you can compare the effects of market volatilities on Dow Jones and Siit World 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 Siit World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Siit World.
Diversification Opportunities for Dow Jones and Siit World
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Siit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Siit World Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit World Select 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 Siit World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit World Select has no effect on the direction of Dow Jones i.e., Dow Jones and Siit World go up and down completely randomly.
Pair Corralation between Dow Jones and Siit World
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Siit World. In addition to that, Dow Jones is 1.27 times more volatile than Siit World Select. It trades about -0.01 of its total potential returns per unit of risk. Siit World Select is currently generating about 0.12 per unit of volatility. If you would invest 1,302 in Siit World Select on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Siit World Select or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Siit World Select
Performance |
| Timeline |
Dow Jones and Siit World Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Siit World Select
Pair trading matchups for Siit World
Pair Trading with Dow Jones and Siit World
The main advantage of trading using opposite Dow Jones and Siit World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Siit World 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 Siit World will offset losses from the drop in Siit World's long position.| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
| Siit World vs. Simt Multi Asset Accumulation | Siit World vs. Saat Market Growth | Siit World vs. Simt Real Return | Siit World vs. Simt Small Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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