Pair Correlation Between DOW and MerVal

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

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 1.0833183036003939E15 times less return on investment than MerVal. But when comparing it to its historical volatility, DOW is 5.726352724146052E14 times less risky than MerVal. It trades about 0.11 of its potential returns per unit of risk. MerVal is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,787,824  in MerVal on October 25, 2017 and sell it today you would lose (58,493)  from holding MerVal or give up 2.1% of portfolio value over 30 days.

Correlation Coefficient

Pair Corralation between DOW and MerVal


Time Period1 Month [change]
ValuesDaily Returns


Very good diversification

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

Comparative Volatility

 Predicted Return Density