Correlation Analysis Between DOW and Facebook

This module allows you to analyze existing cross correlation between DOW and Facebook. You can compare the effects of market volatilities on DOW and Facebook 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 Facebook. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Facebook.
Horizon     30 Days    Login   to change
Symbolsvs
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Comparative Performance

 Predicted Return Density 
      Returns 

DOW  vs.  Facebook Inc

 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 0.62 times more return on investment than Facebook. However, DOW is 1.62 times less risky than Facebook. It trades about 0.08 of its potential returns per unit of risk. Facebook is currently generating about 0.0 per unit of risk. If you would invest  2,611,253  in DOW on August 16, 2019 and sell it today you would earn a total of  110,699  from holding DOW or generate 4.24% return on investment over 30 days.

Pair Corralation between DOW and Facebook

0.14
Time Period3 Months [change]
DirectionPositive 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for DOW and Facebook

DOW diversification synergy

Average diversification

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