Pair Correlation Between DOW and International Business

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

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to under-perform the International Business. But the index apears to be less risky and, when comparing its historical volatility, DOW is 1.28 times less risky than International Business. The index trades about -0.15 of its potential returns per unit of risk. The International Business Machines Corporation is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  15,318  in International Business Machines Corporation on February 22, 2018 and sell it today you would lose (429.00)  from holding International Business Machines Corporation or give up 2.8% of portfolio value over 30 days.

Correlation Coefficient

Pair Corralation between DOW and International Business


Time Period1 Month [change]
ValuesDaily Returns


Poor diversification

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

Comparative Volatility

 Predicted Return Density