This module allows you to analyze existing cross correlation between DOW and S&P 500. You can compare the effects of market volatilities on DOW and SP 500 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 with a short position of SP 500. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and SP 500.
|Time Horizon||30 Days Login to change|
DOW vs. S&P 500
Given the investment horizon of 30 days, DOW is not expected to generate positive returns. Moreover, DOW is 1.32 times more volatile than S&P 500. It trades away all of its potential returns to assume current level of volatility. S&P 500 is currently generating about 0.14 per unit of risk. If you would invest 270,581 in S&P 500 on May 20, 2018 and sell it today you would earn a total of 5,678 from holding S&P 500 or generate 2.1% return on investment over 30 days.