Correlation Between IQ 50 and Dow Jones
Can any of the company-specific risk be diversified away by investing in both IQ 50 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 IQ 50 and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ 50 Percent and Dow Jones Industrial, you can compare the effects of market volatilities on IQ 50 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 IQ 50 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ 50 and Dow Jones.
Diversification Opportunities for IQ 50 and Dow Jones
Very good diversification
The 3 months correlation between HFXI and Dow is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding IQ 50 Percent 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 IQ 50 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 IQ 50 Percent 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 IQ 50 i.e., IQ 50 and Dow Jones go up and down completely randomly.
Pair Corralation between IQ 50 and Dow Jones
Given the investment horizon of 90 days IQ 50 Percent is expected to under-perform the Dow Jones. In addition to that, IQ 50 is 1.07 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
IQ 50 Percent vs. Dow Jones Industrial
Performance |
| Timeline |
IQ 50 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
IQ 50 Percent
Pair trading matchups for IQ 50
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with IQ 50 and Dow Jones
The main advantage of trading using opposite IQ 50 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ 50 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.| IQ 50 vs. iShares ESG Aggregate | IQ 50 vs. SPDR MSCI Emerging | IQ 50 vs. Aquagold International | IQ 50 vs. Thrivent High Yield |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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