Correlation Between Dow Jones and Mainstay Cbre
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mainstay Cbre 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 Mainstay Cbre 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 Mainstay Cbre Global, you can compare the effects of market volatilities on Dow Jones and Mainstay Cbre 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 Mainstay Cbre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mainstay Cbre.
Diversification Opportunities for Dow Jones and Mainstay Cbre
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Mainstay is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mainstay Cbre Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cbre 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 Mainstay Cbre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cbre Global has no effect on the direction of Dow Jones i.e., Dow Jones and Mainstay Cbre go up and down completely randomly.
Pair Corralation between Dow Jones and Mainstay Cbre
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.47 times more return on investment than Mainstay Cbre. However, Dow Jones is 1.47 times more volatile than Mainstay Cbre Global. It trades about 0.24 of its potential returns per unit of risk. Mainstay Cbre Global is currently generating about 0.1 per unit of risk. If you would invest 4,211,440 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 218,211 from holding Dow Jones Industrial or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mainstay Cbre Global
Performance |
| Timeline |
Dow Jones and Mainstay Cbre Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mainstay Cbre Global
Pair trading matchups for Mainstay Cbre
Pair Trading with Dow Jones and Mainstay Cbre
The main advantage of trading using opposite Dow Jones and Mainstay Cbre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mainstay Cbre 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 Mainstay Cbre will offset losses from the drop in Mainstay Cbre's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| Mainstay Cbre vs. Mainstay Tax Free | Mainstay Cbre vs. Mainstay Large Cap | Mainstay Cbre vs. Mainstay Large Cap | Mainstay Cbre vs. Mainstay Large 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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