Correlation Analysis 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.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

 Predicted Return Density 
      Returns 

DOW  vs.  International Business Machine

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.59 times more return on investment than International Business. However, DOW is 1.7 times less risky than International Business. It trades about -0.05 of its potential returns per unit of risk. International Business Machines Corporation is currently generating about -0.16 per unit of risk. If you would invest  2,533,999  in DOW on November 14, 2018 and sell it today you would lose (74,261)  from holding DOW or give up 2.93% of portfolio value over 30 days.

Pair Corralation between DOW and International Business

0.34
Time Period2 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for DOW and International Business

DOW diversification synergy

Weak 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.
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See also your portfolio center. Please also try Money Flow Index module to determine momentum by analyzing money flow index and other technical indicators.


 
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