Correlation Between Beta ETF and Dow Jones
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By analyzing existing cross correlation between Beta ETF SP and Dow Jones Industrial, you can compare the effects of market volatilities on Beta ETF 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 Beta ETF with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta ETF and Dow Jones.
Diversification Opportunities for Beta ETF and Dow Jones
Very poor diversification
The 3 months correlation between Beta and Dow is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Beta ETF SP 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 Beta ETF 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 Beta ETF SP 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 Beta ETF i.e., Beta ETF and Dow Jones go up and down completely randomly.
Pair Corralation between Beta ETF and Dow Jones
Assuming the 90 days trading horizon Beta ETF SP is expected to generate 1.22 times more return on investment than Dow Jones. However, Beta ETF is 1.22 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 6,884 in Beta ETF SP on August 29, 2024 and sell it today you would earn a total of 3,506 from holding Beta ETF SP or generate 50.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Beta ETF SP vs. Dow Jones Industrial
Performance |
| Timeline |
Beta ETF and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Beta ETF SP
Pair trading matchups for Beta ETF
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Beta ETF and Dow Jones
The main advantage of trading using opposite Beta ETF and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta ETF 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.| Beta ETF vs. Asseco Business Solutions | Beta ETF vs. Detalion Games SA | Beta ETF vs. Asseco South Eastern | Beta ETF vs. CFI Holding SA |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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