Correlation Between Absa Multi and Dow Jones
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By analyzing existing cross correlation between Absa Multi Managed and Dow Jones Industrial, you can compare the effects of market volatilities on Absa Multi 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 Absa Multi with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absa Multi and Dow Jones.
Diversification Opportunities for Absa Multi and Dow Jones
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absa and Dow is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Absa Multi Managed 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 Absa Multi 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 Absa Multi Managed 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 Absa Multi i.e., Absa Multi and Dow Jones go up and down completely randomly.
Pair Corralation between Absa Multi and Dow Jones
Assuming the 90 days trading horizon Absa Multi is expected to generate 1.79 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Absa Multi Managed is 2.19 times less risky than Dow Jones. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,879,899 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 590,654 from holding Dow Jones Industrial or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absa Multi Managed vs. Dow Jones Industrial
Performance |
| Timeline |
Absa Multi and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Absa Multi Managed
Pair trading matchups for Absa Multi
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Absa Multi and Dow Jones
The main advantage of trading using opposite Absa Multi and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absa Multi 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.| Absa Multi vs. Sasol Ltd Bee | Absa Multi vs. Centaur Bci Balanced | Absa Multi vs. Sabvest Capital | Absa Multi vs. Growthpoint Properties |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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