Pair Correlation Between DOW and United States

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

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.32 times more return on investment than United States. However, DOW is 3.13 times less risky than United States. It trades about 0.5 of its potential returns per unit of risk. United States Gasoline is currently generating about -0.1 per unit of risk. If you would invest  2,327,128  in DOW on November 15, 2017 and sell it today you would earn a total of  123,738  from holding DOW or generate 5.32% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and United States
-0.68

Parameters

Time Period1 Month [change]
DirectionNegative 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Diversification

Excellent diversification

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

 Predicted Return Density 
      Returns