This module allows you to analyze existing cross correlation between DOW and IPC. You can compare the effects of market volatilities on DOW and IPC 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 IPC. See also your portfolio center
. Please also check ongoing floating volatility patterns of DOW
DOW vs. IPC
Given the investment horizon of 30 days, DOW is expected to generate 10.29 times less return on investment than IPC. But when comparing it to its historical volatility, DOW is 1.17 times less risky than IPC. It trades about 0.02 of its potential returns per unit of risk. IPC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,666,087 in IPC on June 17, 2018 and sell it today you would earn a total of 179,334 from holding IPC or generate 3.84% return on investment over 30 days.
Pair Corralation between DOW and IPC
|Time Period||1 Month [change]|
Overlapping area represents the amount of risk that can be diversified away by holding DOW and IPC in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on IPC 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 IPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPC has no effect on the direction of DOW i.e. DOW and IPC go up and down completely randomly.
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