Correlation Between Advanced Ceramic and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Advanced Ceramic 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 Advanced Ceramic and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Ceramic X and Dow Jones Industrial, you can compare the effects of market volatilities on Advanced Ceramic 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 Advanced Ceramic with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Ceramic and Dow Jones.
Diversification Opportunities for Advanced Ceramic and Dow Jones
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Dow is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Ceramic X 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 Advanced Ceramic 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 Advanced Ceramic X 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 Advanced Ceramic i.e., Advanced Ceramic and Dow Jones go up and down completely randomly.
Pair Corralation between Advanced Ceramic and Dow Jones
Assuming the 90 days trading horizon Advanced Ceramic X is expected to under-perform the Dow Jones. In addition to that, Advanced Ceramic is 3.18 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of volatility. If you would invest 3,868,632 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 603,574 from holding Dow Jones Industrial or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Ceramic X vs. Dow Jones Industrial
Performance |
| Timeline |
Advanced Ceramic and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Advanced Ceramic X
Pair trading matchups for Advanced Ceramic
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Advanced Ceramic and Dow Jones
The main advantage of trading using opposite Advanced Ceramic and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Ceramic 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.| Advanced Ceramic vs. Accton Technology Corp | Advanced Ceramic vs. Wistron NeWeb Corp | Advanced Ceramic vs. Arcadyan Technology Corp | Advanced Ceramic vs. Sercomm Corp |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |