Correlation Between Alexander Marine and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Alexander Marine 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 Alexander Marine and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexander Marine Co and Dow Jones Industrial, you can compare the effects of market volatilities on Alexander Marine 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 Alexander Marine with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexander Marine and Dow Jones.
Diversification Opportunities for Alexander Marine and Dow Jones
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alexander and Dow is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alexander Marine 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 Alexander Marine 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 Alexander Marine 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 Alexander Marine i.e., Alexander Marine and Dow Jones go up and down completely randomly.
Pair Corralation between Alexander Marine and Dow Jones
Assuming the 90 days trading horizon Alexander Marine is expected to generate 15.18 times less return on investment than Dow Jones. In addition to that, Alexander Marine is 4.18 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,378,148 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 1,094,058 from holding Dow Jones Industrial or generate 32.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Alexander Marine Co vs. Dow Jones Industrial
Performance |
| Timeline |
Alexander Marine and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Alexander Marine Co
Pair trading matchups for Alexander Marine
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Alexander Marine and Dow Jones
The main advantage of trading using opposite Alexander Marine and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexander Marine 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.| Alexander Marine vs. Chung Hsin Electric Machinery | Alexander Marine vs. Andes Technology Corp | Alexander Marine vs. Asia Vital Components | Alexander Marine vs. Fulgent Sun International |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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