Pair Correlation Between NIKKEI 225 and DOW

This module allows you to analyze existing cross correlation between NIKKEI 225 and DOW. You can compare the effects of market volatilities on NIKKEI 225 and DOW 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 NIKKEI 225 with a short position of DOW. See also your portfolio center. Please also check ongoing floating volatility patterns of NIKKEI 225 and DOW.
 Time Horizon     30 Days    Login   to change
 NIKKEI 225  vs   DOW
 Performance (%) 

Pair Volatility

Assuming 30 trading days horizon, NIKKEI 225 is expected to under-perform the DOW. But the index apears to be less risky and, when comparing its historical volatility, NIKKEI 225 is 1.15 times less risky than DOW. The index trades about -0.21 of its potential returns per unit of risk. The DOW is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,661,671  in DOW on January 26, 2018 and sell it today you would lose (130,672)  from holding DOW or give up 4.91% of portfolio value over 30 days.

Correlation Coefficient

Pair Corralation between NIKKEI 225 and DOW


Time Period1 Month [change]
StrengthVery Strong
ValuesDaily Returns


Almost no diversification

Overlapping area represents the amount of risk that can be diversified away by holding NIKKEI 225 and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and NIKKEI 225 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 NIKKEI 225 are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of NIKKEI 225 i.e. NIKKEI 225 and DOW go up and down completely randomly.

Comparative Volatility

 Predicted Return Density