Correlation Between Main International and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Main International 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 Main International and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main International ETF and Dow Jones Industrial, you can compare the effects of market volatilities on Main International 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 Main International with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main International and Dow Jones.
Diversification Opportunities for Main International and Dow Jones
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Main and Dow is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF 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 Main International 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 Main International ETF 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 Main International i.e., Main International and Dow Jones go up and down completely randomly.
Pair Corralation between Main International and Dow Jones
Given the investment horizon of 90 days Main International is expected to generate 1.79 times less return on investment than Dow Jones. In addition to that, Main International is 1.23 times more volatile than Dow Jones Industrial. It trades about 0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,392,601 in Dow Jones Industrial on October 25, 2024 and sell it today you would earn a total of 1,063,906 from holding Dow Jones Industrial or generate 31.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Main International ETF vs. Dow Jones Industrial
Performance |
| Timeline |
Main International and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Main International ETF
Pair trading matchups for Main International
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Main International and Dow Jones
The main advantage of trading using opposite Main International and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main International 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.| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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