Pair Correlation Between DOW and BioShares Biotechnology

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

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 2.6 times less return on investment than BioShares Biotechnology. But when comparing it to its historical volatility, DOW is 3.88 times less risky than BioShares Biotechnology. It trades about 0.55 of its potential returns per unit of risk. BioShares Biotechnology Clinical Trials is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  2,762  in BioShares Biotechnology Clinical Trials on December 21, 2017 and sell it today you would earn a total of  364  from holding BioShares Biotechnology Clinical Trials or generate 13.18% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and BioShares Biotechnology
0.81

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Diversification

Very poor diversification

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

 Predicted Return Density 
      Returns