Correlation Between Ampire and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ampire 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 Ampire and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampire Co and Dow Jones Industrial, you can compare the effects of market volatilities on Ampire 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 Ampire with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampire and Dow Jones.
Diversification Opportunities for Ampire and Dow Jones
Good diversification
The 3 months correlation between Ampire and Dow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ampire Co 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 Ampire 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 Ampire Co 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 Ampire i.e., Ampire and Dow Jones go up and down completely randomly.
Pair Corralation between Ampire and Dow Jones
Assuming the 90 days trading horizon Ampire Co is expected to under-perform the Dow Jones. In addition to that, Ampire is 1.44 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,466,372 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,011,828 from holding Dow Jones Industrial or generate 29.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.74% |
| Values | Daily Returns |
Ampire Co vs. Dow Jones Industrial
Performance |
| Timeline |
Ampire and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ampire Co
Pair trading matchups for Ampire
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ampire and Dow Jones
The main advantage of trading using opposite Ampire and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampire 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.| Ampire vs. Sitronix Technology Corp | Ampire vs. Kinsus Interconnect Technology | Ampire vs. WiseChip Semiconductor | Ampire vs. Novatek Microelectronics Corp |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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