Correlation Between Dow Jones and IShares EUR
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By analyzing existing cross correlation between Dow Jones Industrial and iShares EUR Cash, you can compare the effects of market volatilities on Dow Jones and IShares EUR 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 IShares EUR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and IShares EUR.
Diversification Opportunities for Dow Jones and IShares EUR
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and IShares is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and iShares EUR Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares EUR Cash 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 IShares EUR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares EUR Cash has no effect on the direction of Dow Jones i.e., Dow Jones and IShares EUR go up and down completely randomly.
Pair Corralation between Dow Jones and IShares EUR
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 17.45 times more return on investment than IShares EUR. However, Dow Jones is 17.45 times more volatile than iShares EUR Cash. It trades about 0.07 of its potential returns per unit of risk. iShares EUR Cash is currently generating about 0.33 per unit of risk. If you would invest 3,740,435 in Dow Jones Industrial on October 16, 2024 and sell it today you would earn a total of 489,277 from holding Dow Jones Industrial or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.24% |
| Values | Daily Returns |
Dow Jones Industrial vs. iShares EUR Cash
Performance |
| Timeline |
Dow Jones and IShares EUR Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
iShares EUR Cash
Pair trading matchups for IShares EUR
Pair Trading with Dow Jones and IShares EUR
The main advantage of trading using opposite Dow Jones and IShares EUR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, IShares EUR 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 IShares EUR will offset losses from the drop in IShares EUR's long position.| Dow Jones vs. Gfl Environmental Holdings | Dow Jones vs. Lizhan Environmental | Dow Jones vs. Grupo Simec SAB | Dow Jones vs. Constellation Brands Class |
| IShares EUR vs. iShares Govt Bond | IShares EUR vs. iShares Global AAA AA | IShares EUR vs. iShares Smart City | IShares EUR vs. iShares Broad High |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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