Correlation Between Dow Jones and Mainstay Government
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Mainstay Government 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 Dow Jones and Mainstay Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Mainstay Government Liquidity, you can compare the effects of market volatilities on Dow Jones and Mainstay Government 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 Dow Jones with a short position of Mainstay Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mainstay Government.
Diversification Opportunities for Dow Jones and Mainstay Government
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Mainstay is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Mainstay Government Liquidity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Government and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Mainstay Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Government has no effect on the direction of Dow Jones i.e., Dow Jones and Mainstay Government go up and down completely randomly.
Pair Corralation between Dow Jones and Mainstay Government
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.19 times more return on investment than Mainstay Government. However, Dow Jones Industrial is 5.18 times less risky than Mainstay Government. It trades about 0.08 of its potential returns per unit of risk. Mainstay Government Liquidity is currently generating about -0.02 per unit of risk. If you would invest 3,313,637 in Dow Jones Industrial on September 24, 2024 and sell it today you would earn a total of 970,389 from holding Dow Jones Industrial or generate 29.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.59% |
Values | Daily Returns |
Dow Jones Industrial vs. Mainstay Government Liquidity
Performance |
Timeline |
Dow Jones and Mainstay Government Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mainstay Government Liquidity
Pair trading matchups for Mainstay Government
Pair Trading with Dow Jones and Mainstay Government
The main advantage of trading using opposite Dow Jones and Mainstay Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Mainstay Government 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 Mainstay Government will offset losses from the drop in Mainstay Government's long position.Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
Mainstay Government vs. Vanguard Total Stock | Mainstay Government vs. Vanguard 500 Index | Mainstay Government vs. Vanguard Total Stock | Mainstay Government vs. Vanguard Total Stock |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |