This module allows you to analyze existing cross correlation between DOW and Barclays Bank PLC iPath Series B Bloomberg Natural Gas Subindex Total Return ETN. You can compare the effects of market volatilities on DOW and Barclays Bank 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 Barclays Bank. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Barclays Bank.
Given the investment horizon of 30 days, DOW is expected to generate 0.21 times more return on investment than Barclays Bank. However, DOW is 4.65 times less risky than Barclays Bank. It trades about 0.24 of its potential returns per unit of risk. Barclays Bank PLC iPath Series B Bloomberg Natural Gas Subindex Total Return ETN is currently generating about -0.03 per unit of risk. If you would invest 2,504,429 in DOW on July 21, 2018 and sell it today you would earn a total of 71,440 from holding DOW or generate 2.85% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding DOW and Barclays Bank PLC iPath Series in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Barclays Bank PLC 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 Barclays Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Bank PLC has no effect on the direction of DOW i.e. DOW and Barclays Bank go up and down completely randomly.
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