Correlation Between Aba Chemicals and Dow Jones
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By analyzing existing cross correlation between Aba Chemicals Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Dow Jones.
Diversification Opportunities for Aba Chemicals and Dow Jones
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Dow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp 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 Aba Chemicals 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 Aba Chemicals Corp 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 Aba Chemicals i.e., Aba Chemicals and Dow Jones go up and down completely randomly.
Pair Corralation between Aba Chemicals and Dow Jones
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Dow Jones. In addition to that, Aba Chemicals is 3.67 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of volatility. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Aba Chemicals and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aba Chemicals Corp
Pair trading matchups for Aba Chemicals
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aba Chemicals and Dow Jones
The main advantage of trading using opposite Aba Chemicals and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Rongsheng Petrochemical Co | Aba Chemicals vs. Hoshine Silicon Ind |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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