Correlation Analysis Between DOW and IBEX 35

This module allows you to analyze existing cross correlation between DOW and IBEX 35. You can compare the effects of market volatilities on DOW and IBEX 35 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 IBEX 35. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and IBEX 35.
Horizon     30 Days    Login   to change

DOW  vs.  IBEX 35

 Performance (%) 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to under-perform the IBEX 35. In addition to that, DOW is 1.11 times more volatile than IBEX 35. It trades about -0.06 of its total potential returns per unit of risk. IBEX 35 is currently generating about -0.04 per unit of volatility. If you would invest  890,200  in IBEX 35 on November 11, 2018 and sell it today you would lose (19,210)  from holding IBEX 35 or give up 2.16% of portfolio value over 30 days.

Pair Corralation between DOW and IBEX 35

Time Period2 Months [change]
ValuesDaily Returns


DOW diversification synergy

Very weak diversification

Overlapping area represents the amount of risk that can be diversified away by holding DOW and IBEX 35 in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on IBEX 35 and DOW 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 are associated (or correlated) with IBEX 35. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX 35 has no effect on the direction of DOW i.e. DOW and IBEX 35 go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 

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