Correlation Between KSM Mutual and Dow Jones
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By analyzing existing cross correlation between KSM Mutual Funds and Dow Jones Industrial, you can compare the effects of market volatilities on KSM Mutual 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 KSM Mutual with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSM Mutual and Dow Jones.
Diversification Opportunities for KSM Mutual and Dow Jones
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KSM and Dow is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KSM Mutual Funds 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 KSM Mutual 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 KSM Mutual Funds 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 KSM Mutual i.e., KSM Mutual and Dow Jones go up and down completely randomly.
Pair Corralation between KSM Mutual and Dow Jones
Assuming the 90 days trading horizon KSM Mutual is expected to generate 2.83 times less return on investment than Dow Jones. But when comparing it to its historical volatility, KSM Mutual Funds is 1.1 times less risky than Dow Jones. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 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 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.61% |
| Values | Daily Returns |
KSM Mutual Funds vs. Dow Jones Industrial
Performance |
| Timeline |
KSM Mutual and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
KSM Mutual Funds
Pair trading matchups for KSM Mutual
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KSM Mutual and Dow Jones
The main advantage of trading using opposite KSM Mutual and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSM Mutual 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.| KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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