Correlation Between Inverse Dow and Utilities Fund
Can any of the company-specific risk be diversified away by investing in both Inverse Dow and Utilities Fund 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 Inverse Dow and Utilities Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Dow 2x and Utilities Fund Investor, you can compare the effects of market volatilities on Inverse Dow and Utilities Fund 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 Inverse Dow with a short position of Utilities Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Dow and Utilities Fund.
Diversification Opportunities for Inverse Dow and Utilities Fund
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inverse and Utilities is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Dow 2x and Utilities Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Investor and Inverse 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 Inverse Dow 2x are associated (or correlated) with Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Investor has no effect on the direction of Inverse Dow i.e., Inverse Dow and Utilities Fund go up and down completely randomly.
Pair Corralation between Inverse Dow and Utilities Fund
Assuming the 90 days horizon Inverse Dow 2x is expected to under-perform the Utilities Fund. In addition to that, Inverse Dow is 2.73 times more volatile than Utilities Fund Investor. It trades about -0.01 of its total potential returns per unit of risk. Utilities Fund Investor is currently generating about 0.14 per unit of volatility. If you would invest 6,871 in Utilities Fund Investor on September 1, 2025 and sell it today you would earn a total of 121.00 from holding Utilities Fund Investor or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Dow 2x vs. Utilities Fund Investor
Performance |
| Timeline |
| Inverse Dow 2x |
| Utilities Fund Investor |
Inverse Dow and Utilities Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Dow and Utilities Fund
The main advantage of trading using opposite Inverse Dow and Utilities Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Dow position performs unexpectedly, Utilities Fund 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 Utilities Fund will offset losses from the drop in Utilities Fund's long position.| Inverse Dow vs. Angel Oak Financial | Inverse Dow vs. Financial Industries Fund | Inverse Dow vs. Mesirow Financial Small | Inverse Dow vs. Fidelity Advisor Financial |
| Utilities Fund vs. Global Gold Fund | Utilities Fund vs. International Investors Gold | Utilities Fund vs. Gabelli Gold Fund | Utilities Fund vs. Invesco Gold Special |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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