Correlation Between OShares Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both OShares Global 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 OShares Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OShares Global Internet and Dow Jones Industrial, you can compare the effects of market volatilities on OShares Global 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 OShares Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of OShares Global and Dow Jones.
Diversification Opportunities for OShares Global and Dow Jones
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between OShares and Dow is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding OShares Global Internet 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 OShares Global 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 OShares Global Internet 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 OShares Global i.e., OShares Global and Dow Jones go up and down completely randomly.
Pair Corralation between OShares Global and Dow Jones
Given the investment horizon of 90 days OShares Global Internet is expected to generate 2.02 times more return on investment than Dow Jones. However, OShares Global is 2.02 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 2,606 in OShares Global Internet on September 4, 2024 and sell it today you would earn a total of 2,209 from holding OShares Global Internet or generate 84.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OShares Global Internet vs. Dow Jones Industrial
Performance |
| Timeline |
OShares Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
OShares Global Internet
Pair trading matchups for OShares Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with OShares Global and Dow Jones
The main advantage of trading using opposite OShares Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OShares Global 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.| OShares Global vs. Vanguard Information Technology | OShares Global vs. Technology Select Sector | OShares Global vs. iShares Technology ETF | OShares Global vs. VanEck Semiconductor ETF |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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