Correlation Between DSJA and ProShares MSCI

Can any of the company-specific risk be diversified away by investing in both DSJA and ProShares MSCI 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 DSJA and ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DSJA and ProShares MSCI EAFE, you can compare the effects of market volatilities on DSJA and ProShares MSCI 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 DSJA with a short position of ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and ProShares MSCI.

Diversification Opportunities for DSJA and ProShares MSCI

-0.88

Correlation Coefficient

DSJA  ProShares MSCI

Pay attention - limited upside

The 3 months correlation between DSJA and ProShares is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and ProShares MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI EAFE and DSJA 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 DSJA are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI EAFE has no effect on the direction of DSJA i.e., DSJA and ProShares MSCI go up and down completely randomly.

Pair Corralation between DSJA and ProShares MSCI

If you would invest  2,865  in DSJA on September 1, 2024 and sell it today you would earn a total of  0.00  from holding DSJA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

DSJA  vs.  ProShares MSCI EAFE

DSJA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, DSJA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ProShares MSCI EAFE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares MSCI EAFE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ProShares MSCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DSJA and ProShares MSCI

The main advantage of trading using opposite DSJA and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.

The idea behind DSJA and ProShares MSCI EAFE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.