Correlation Between Manning Napier and Dow Jones

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Manning Napier and Dow Jones 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 Manning Napier and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manning Napier Callodine and Dow Jones Industrial, you can compare the effects of market volatilities on Manning Napier and Dow Jones 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 Manning Napier with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manning Napier and Dow Jones.

Diversification Opportunities for Manning Napier and Dow Jones

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Manning and Dow is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Manning Napier Callodine and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Manning Napier 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 Manning Napier Callodine are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Manning Napier i.e., Manning Napier and Dow Jones go up and down completely randomly.
    Optimize

Pair Corralation between Manning Napier and Dow Jones

Assuming the 90 days horizon Manning Napier Callodine is expected to generate 1.2 times more return on investment than Dow Jones. However, Manning Napier is 1.2 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.18 per unit of risk. If you would invest  1,384  in Manning Napier Callodine on September 11, 2024 and sell it today you would earn a total of  161.00  from holding Manning Napier Callodine or generate 11.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Manning Napier Callodine  vs.  Dow Jones Industrial

 Performance 
       Timeline  

Manning Napier and Dow Jones Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Manning Napier and Dow Jones

The main advantage of trading using opposite Manning Napier and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manning Napier position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.
The idea behind Manning Napier Callodine and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Share Portfolio
Track or share privately all of your investments from the convenience of any device