Pair Correlation Between DOW and Target

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

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 2.73 times less return on investment than Target. But when comparing it to its historical volatility, DOW is 6.13 times less risky than Target. It trades about 0.5 of its potential returns per unit of risk. Target Corporation is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  5,510  in Target Corporation on November 16, 2017 and sell it today you would earn a total of  751  from holding Target Corporation or generate 13.63% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and Target
0.88

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 Target Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of DOW i.e. DOW and Target go up and down completely randomly.
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Comparative Volatility

 Predicted Return Density 
      Returns