Correlation Between Dow Jones and VanEck Preferred
Can any of the company-specific risk be diversified away by investing in both Dow Jones and VanEck Preferred at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dow Jones and VanEck Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and VanEck Preferred Securities, you can compare the effects of market volatilities on Dow Jones and VanEck Preferred 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 Jones with a short position of VanEck Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and VanEck Preferred.
Diversification Opportunities for Dow Jones and VanEck Preferred
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and VanEck is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and VanEck Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Preferred Sec and Dow Jones 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 Jones Industrial are associated (or correlated) with VanEck Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Preferred Sec has no effect on the direction of Dow Jones i.e., Dow Jones and VanEck Preferred go up and down completely randomly.
Pair Corralation between Dow Jones and VanEck Preferred
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.74 times more return on investment than VanEck Preferred. However, Dow Jones is 1.74 times more volatile than VanEck Preferred Securities. It trades about 0.01 of its potential returns per unit of risk. VanEck Preferred Securities is currently generating about 0.0 per unit of risk. If you would invest 4,198,535 in Dow Jones Industrial on March 21, 2025 and sell it today you would earn a total of 18,631 from holding Dow Jones Industrial or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Dow Jones Industrial vs. VanEck Preferred Securities
Performance |
| Timeline |
Dow Jones and VanEck Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
VanEck Preferred Securities
Pair trading matchups for VanEck Preferred
Pair Trading with Dow Jones and VanEck Preferred
The main advantage of trading using opposite Dow Jones and VanEck Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, VanEck Preferred can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VanEck Preferred will offset losses from the drop in VanEck Preferred's long position.| Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Catalyst Metals Limited | Dow Jones vs. Ximen Mining Corp | Dow Jones vs. Japan Tobacco ADR |
| VanEck Preferred vs. Global X SuperIncome | VanEck Preferred vs. SPDR ICE Preferred | VanEck Preferred vs. Invesco Preferred ETF | VanEck Preferred vs. Invesco Variable Rate |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets |