Correlation Between Markel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Markel 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 Markel and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Markel and Dow Jones Industrial, you can compare the effects of market volatilities on Markel 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 Markel with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markel and Dow Jones.
Diversification Opportunities for Markel and Dow Jones
Very poor diversification
The 3 months correlation between Markel and Dow is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Markel 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 Markel 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 Markel 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 Markel i.e., Markel and Dow Jones go up and down completely randomly.
Pair Corralation between Markel and Dow Jones
Assuming the 90 days horizon Markel is expected to generate 1.89 times more return on investment than Dow Jones. However, Markel is 1.89 times more volatile than Dow Jones Industrial. It trades about 0.46 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of risk. If you would invest 141,400 in Markel on September 1, 2024 and sell it today you would earn a total of 28,900 from holding Markel or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Markel vs. Dow Jones Industrial
Performance |
| Timeline |
Markel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Markel
Pair trading matchups for Markel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Markel and Dow Jones
The main advantage of trading using opposite Markel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markel 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.| Markel vs. Vishay Intertechnology | Markel vs. Check Point Software | Markel vs. PennantPark Investment | Markel vs. REINET INVESTMENTS SCA |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| 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 | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |