Correlation Analysis Between NASDAQ Italy and DOW

Analyzing existing cross correlation between NASDAQ Italy and DOW. You can compare the effects of market volatilities on NASDAQ Italy 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 NASDAQ Italy with a short position of DOW. See also your portfolio center. Please also check ongoing floating volatility patterns of NASDAQ Italy and DOW.
Horizon     30 Days    Login   to change
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Comparative Performance

 Predicted Return Density 
    
  Returns 

NASDAQ Italy  vs.  DOW

 Performance (%) 
    
  Timeline 

Pair Volatility

Assuming 30 trading days horizon, NASDAQ Italy is expected to generate 1.86 times less return on investment than DOW. In addition to that, NASDAQ Italy is 1.73 times more volatile than DOW. It trades about 0.1 of its total potential returns per unit of risk. DOW is currently generating about 0.31 per unit of volatility. If you would invest  2,678,810  in DOW on December 21, 2019 and sell it today you would earn a total of  256,000  from holding DOW or generate 9.56% return on investment over 30 days.

Pair Corralation between NASDAQ Italy and DOW

0.87
Time Period3 Months [change]
DirectionPositive 
StrengthStrong
Accuracy78.48%
ValuesDaily Returns

Diversification Opportunities for NASDAQ Italy and DOW

NASDAQ Italy diversification synergy

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding NASDAQ Italy and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and NASDAQ Italy 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 NASDAQ Italy 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 NASDAQ Italy i.e. NASDAQ Italy and DOW go up and down completely randomly.
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