Pair Correlation Between DOW and Wells Fargo

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

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.24 times more return on investment than Wells Fargo. However, DOW is 4.16 times less risky than Wells Fargo. It trades about 0.65 of its potential returns per unit of risk. Wells Fargo Company is currently generating about 0.07 per unit of risk. If you would invest  2,235,923  in DOW on September 21, 2017 and sell it today you would earn a total of  80,381  from holding DOW or generate 3.59% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and Wells Fargo
-0.07

Parameters

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

Diversification

Good diversification

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

 Predicted Return Density 
      Returns