This module allows you to analyze existing cross correlation between DOW and Russell 2000 . You can compare the effects of market volatilities on DOW and Russell 2000 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 Russell 2000. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Russell 2000.
|Time Horizon||30 Days Login to change|
DOW vs. Russell 2000
Given the investment horizon of 30 days, DOW is not expected to generate positive returns. Moreover, DOW is 1.35 times more volatile than Russell 2000 . It trades away all of its potential returns to assume current level of volatility. Russell 2000 is currently generating about 0.28 per unit of risk. If you would invest 162,663 in Russell 2000 on May 20, 2018 and sell it today you would earn a total of 6,565 from holding Russell 2000 or generate 4.04% return on investment over 30 days.