Correlation Between IShares Cohen and Dow Jones
Can any of the company-specific risk be diversified away by investing in both IShares Cohen 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 IShares Cohen and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Cohen Steers and Dow Jones Industrial, you can compare the effects of market volatilities on IShares Cohen 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 IShares Cohen with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Cohen and Dow Jones.
Diversification Opportunities for IShares Cohen and Dow Jones
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Dow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding iShares Cohen Steers 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 IShares Cohen 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 iShares Cohen Steers 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 IShares Cohen i.e., IShares Cohen and Dow Jones go up and down completely randomly.
Pair Corralation between IShares Cohen and Dow Jones
Considering the 90-day investment horizon IShares Cohen is expected to generate 2.28 times less return on investment than Dow Jones. In addition to that, IShares Cohen is 1.12 times more volatile than Dow Jones Industrial. It trades about 0.11 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of volatility. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Cohen Steers vs. Dow Jones Industrial
Performance |
| Timeline |
IShares Cohen and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
iShares Cohen Steers
Pair trading matchups for IShares Cohen
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with IShares Cohen and Dow Jones
The main advantage of trading using opposite IShares Cohen and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Cohen 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.| IShares Cohen vs. SPDR Dow Jones | IShares Cohen vs. iShares Real Estate | IShares Cohen vs. iShares North American | IShares Cohen vs. iShares Utilities ETF |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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