Correlation Between Macquarie Focused and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Macquarie Focused and Dow Jones 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 Macquarie Focused and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Focused Emerging and Dow Jones Industrial, you can compare the effects of market volatilities on Macquarie Focused and Dow Jones 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 Macquarie Focused with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Focused and Dow Jones.
Diversification Opportunities for Macquarie Focused and Dow Jones
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Macquarie and Dow is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Focused Emerging and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Macquarie Focused 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 Macquarie Focused Emerging are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Macquarie Focused i.e., Macquarie Focused and Dow Jones go up and down completely randomly.
Pair Corralation between Macquarie Focused and Dow Jones
Given the investment horizon of 90 days Macquarie Focused Emerging is expected to under-perform the Dow Jones. In addition to that, Macquarie Focused is 1.26 times more volatile than Dow Jones Industrial. It trades about -0.21 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. 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 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Focused Emerging vs. Dow Jones Industrial
Performance |
| Timeline |
Macquarie Focused and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Macquarie Focused Emerging
Pair trading matchups for Macquarie Focused
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Macquarie Focused and Dow Jones
The main advantage of trading using opposite Macquarie Focused and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Focused position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Macquarie Focused vs. Invesco PureBeta MSCI | Macquarie Focused vs. Aquagold International | Macquarie Focused vs. Morningstar Unconstrained Allocation | Macquarie Focused vs. High Yield Municipal Fund |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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