Correlation Between Walden Midcap and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Walden Midcap 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 Walden Midcap and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Midcap Fund and Dow Jones Industrial, you can compare the effects of market volatilities on Walden Midcap 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 Walden Midcap with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Midcap and Dow Jones.
Diversification Opportunities for Walden Midcap and Dow Jones
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WALDEN and Dow is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Walden Midcap Fund 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 Walden Midcap 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 Walden Midcap Fund 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 Walden Midcap i.e., Walden Midcap and Dow Jones go up and down completely randomly.
Pair Corralation between Walden Midcap and Dow Jones
Assuming the 90 days horizon Walden Midcap is expected to generate 1.1 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Walden Midcap Fund is 1.16 times less risky than Dow Jones. It trades about 0.39 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walden Midcap Fund vs. Dow Jones Industrial
Performance |
| Timeline |
Walden Midcap and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Walden Midcap Fund
Pair trading matchups for Walden Midcap
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Walden Midcap and Dow Jones
The main advantage of trading using opposite Walden Midcap and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Midcap 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.| Walden Midcap vs. Boston Trust Midcap | Walden Midcap vs. Walden Equity Fund | Walden Midcap vs. Mid Cap Value | Walden Midcap vs. Blackrock Total Stock |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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