Correlation Between Monteagle Select and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Monteagle Select 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 Monteagle Select and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monteagle Select Value and Dow Jones Industrial, you can compare the effects of market volatilities on Monteagle Select 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 Monteagle Select with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monteagle Select and Dow Jones.
Diversification Opportunities for Monteagle Select and Dow Jones
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monteagle and Dow is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Monteagle Select Value 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 Monteagle Select 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 Monteagle Select Value 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 Monteagle Select i.e., Monteagle Select and Dow Jones go up and down completely randomly.
Pair Corralation between Monteagle Select and Dow Jones
Assuming the 90 days horizon Monteagle Select is expected to generate 2.38 times less return on investment than Dow Jones. In addition to that, Monteagle Select is 1.07 times more volatile than Dow Jones Industrial. It trades about 0.03 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 3,780,639 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 568,144 from holding Dow Jones Industrial or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Monteagle Select Value vs. Dow Jones Industrial
Performance |
| Timeline |
Monteagle Select and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Monteagle Select Value
Pair trading matchups for Monteagle Select
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Monteagle Select and Dow Jones
The main advantage of trading using opposite Monteagle Select and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monteagle Select 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.| Monteagle Select vs. The Texas Fund | Monteagle Select vs. Monteagle Enhanced Equity | Monteagle Select vs. The Henssler Equity | Monteagle Select vs. Ivy Small Cap |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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