Correlation Between Lifex Inflation and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Lifex Inflation 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 Lifex Inflation and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifex Inflation Protected Income and Dow Jones Industrial, you can compare the effects of market volatilities on Lifex Inflation 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 Lifex Inflation with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifex Inflation and Dow Jones.
Diversification Opportunities for Lifex Inflation and Dow Jones
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lifex and Dow is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lifex Inflation Protected Inco 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 Lifex Inflation 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 Lifex Inflation Protected Income 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 Lifex Inflation i.e., Lifex Inflation and Dow Jones go up and down completely randomly.
Pair Corralation between Lifex Inflation and Dow Jones
If you would invest 4,344,499 in Dow Jones Industrial on September 16, 2024 and sell it today you would earn a total of 38,307 from holding Dow Jones Industrial or generate 0.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 9.52% |
Values | Daily Returns |
Lifex Inflation Protected Inco vs. Dow Jones Industrial
Performance |
Timeline |
Lifex Inflation and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Lifex Inflation Protected Income
Pair trading matchups for Lifex Inflation
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Lifex Inflation and Dow Jones
The main advantage of trading using opposite Lifex Inflation and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifex Inflation 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.Lifex Inflation vs. Champlain Small | Lifex Inflation vs. Smallcap Growth Fund | Lifex Inflation vs. Ab Small Cap | Lifex Inflation vs. Scout Small Cap |
Dow Jones vs. Ironveld Plc | Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Mid Atlantic Home Health | Dow Jones vs. United Homes Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |