Correlation Between Al Aqar and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Al Aqar 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 Al Aqar and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Al Aqar Healthcare and Dow Jones Industrial, you can compare the effects of market volatilities on Al Aqar 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 Al Aqar with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Al Aqar and Dow Jones.
Diversification Opportunities for Al Aqar and Dow Jones
Poor diversification
The 3 months correlation between 5116 and Dow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Al Aqar Healthcare 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 Al Aqar 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 Al Aqar Healthcare 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 Al Aqar i.e., Al Aqar and Dow Jones go up and down completely randomly.
Pair Corralation between Al Aqar and Dow Jones
Assuming the 90 days trading horizon Al Aqar Healthcare is expected to generate 1.15 times more return on investment than Dow Jones. However, Al Aqar is 1.15 times more volatile than Dow Jones Industrial. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 130.00 in Al Aqar Healthcare on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Al Aqar Healthcare or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Al Aqar Healthcare vs. Dow Jones Industrial
Performance |
| Timeline |
Al Aqar and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Al Aqar Healthcare
Pair trading matchups for Al Aqar
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Al Aqar and Dow Jones
The main advantage of trading using opposite Al Aqar and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Al Aqar 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.| Al Aqar vs. Petronas Chemicals Group | Al Aqar vs. TAS Offshore Bhd | Al Aqar vs. Dnonce Tech Bhd | Al Aqar vs. CPE Technology Berhad |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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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