Correlation Between Pacific Funds and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pacific Funds 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 Pacific Funds and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds Smallmid Cap and Dow Jones Industrial, you can compare the effects of market volatilities on Pacific Funds 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 Pacific Funds with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and Dow Jones.
Diversification Opportunities for Pacific Funds and Dow Jones
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and Dow is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds Smallmid Cap 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 Pacific Funds 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 Pacific Funds Smallmid Cap 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 Pacific Funds i.e., Pacific Funds and Dow Jones go up and down completely randomly.
Pair Corralation between Pacific Funds and Dow Jones
If you would invest 4,234,224 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 114,559 from holding Dow Jones Industrial or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Pacific Funds Smallmid Cap vs. Dow Jones Industrial
Performance |
| Timeline |
Pacific Funds and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pacific Funds Smallmid Cap
Pair trading matchups for Pacific Funds
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pacific Funds and Dow Jones
The main advantage of trading using opposite Pacific Funds and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds 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.| Pacific Funds vs. Profunds Large Cap Growth | Pacific Funds vs. Large Cap Growth Profund | Pacific Funds vs. Avantis Large Cap | Pacific Funds vs. Qs Large 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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