Correlation Between Muzinich and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Muzinich 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 Muzinich and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muzinich High Yield and Dow Jones Industrial, you can compare the effects of market volatilities on Muzinich 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 Muzinich with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muzinich and Dow Jones.
Diversification Opportunities for Muzinich and Dow Jones
Poor diversification
The 3 months correlation between Muzinich and Dow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Muzinich High Yield 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 Muzinich 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 Muzinich High Yield 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 Muzinich i.e., Muzinich and Dow Jones go up and down completely randomly.
Pair Corralation between Muzinich and Dow Jones
Assuming the 90 days horizon Muzinich is expected to generate 3.5 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Muzinich High Yield is 5.32 times less risky than Dow Jones. It trades about 0.25 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Muzinich High Yield vs. Dow Jones Industrial
Performance |
| Timeline |
Muzinich and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Muzinich High Yield
Pair trading matchups for Muzinich
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Muzinich and Dow Jones
The main advantage of trading using opposite Muzinich and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muzinich 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.| Muzinich vs. Muzinich Credit Opportunities | Muzinich vs. Muzinich Low Duration | Muzinich vs. Fidelity Advisor Balanced | Muzinich vs. Schwab Sp 500 |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |