Correlation Between MUNRE and Dow Jones
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By analyzing existing cross correlation between MUNRE 5875 23 MAY 42 and Dow Jones Industrial, you can compare the effects of market volatilities on MUNRE 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 MUNRE with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MUNRE and Dow Jones.
Diversification Opportunities for MUNRE and Dow Jones
Good diversification
The 3 months correlation between MUNRE and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MUNRE 5875 23 MAY 42 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 MUNRE 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 MUNRE 5875 23 MAY 42 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 MUNRE i.e., MUNRE and Dow Jones go up and down completely randomly.
Pair Corralation between MUNRE and Dow Jones
Assuming the 90 days trading horizon MUNRE 5875 23 MAY 42 is expected to under-perform the Dow Jones. But the bond apears to be less risky and, when comparing its historical volatility, MUNRE 5875 23 MAY 42 is 1.67 times less risky than Dow Jones. The bond trades about -0.17 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,429,651 in Dow Jones Industrial on October 23, 2024 and sell it today you would lose (80,868) from holding Dow Jones Industrial or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.9% |
| Values | Daily Returns |
MUNRE 5875 23 MAY 42 vs. Dow Jones Industrial
Performance |
| Timeline |
MUNRE and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MUNRE 5875 23 MAY 42
Pair trading matchups for MUNRE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MUNRE and Dow Jones
The main advantage of trading using opposite MUNRE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MUNRE 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.| MUNRE vs. Helmerich and Payne | MUNRE vs. Romana Food Brands | MUNRE vs. Marfrig Global Foods | MUNRE vs. AMCON Distributing |
| Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. NiSource | Dow Jones vs. Kinetik Holdings | Dow Jones vs. Empresa Distribuidora y |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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