Correlation Between Henderson Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Henderson Global 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 Henderson Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Global Equity and Dow Jones Industrial, you can compare the effects of market volatilities on Henderson Global 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 Henderson Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Global and Dow Jones.
Diversification Opportunities for Henderson Global and Dow Jones
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Henderson and Dow is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Global Equity 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 Henderson Global 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 Henderson Global Equity 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 Henderson Global i.e., Henderson Global and Dow Jones go up and down completely randomly.
Pair Corralation between Henderson Global and Dow Jones
Assuming the 90 days horizon Henderson Global Equity is expected to under-perform the Dow Jones. But the mutual fund apears to be less risky and, when comparing its historical volatility, Henderson Global Equity is 1.74 times less risky than Dow Jones. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 233,449 from holding Dow Jones Industrial or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson Global Equity vs. Dow Jones Industrial
Performance |
| Timeline |
Henderson Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Henderson Global Equity
Pair trading matchups for Henderson Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Henderson Global and Dow Jones
The main advantage of trading using opposite Henderson Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Global 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.| Henderson Global vs. Thornburg Investment Income | Henderson Global vs. Jpmorgan Income Builder | Henderson Global vs. Global Diversified Income | Henderson Global vs. Henderson Global Equity |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stocks Directory Find actively traded stocks across global markets |