Correlation Between ALIOR BANK and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ALIOR BANK 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 ALIOR BANK and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALIOR BANK and Dow Jones Industrial, you can compare the effects of market volatilities on ALIOR BANK 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 ALIOR BANK with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALIOR BANK and Dow Jones.
Diversification Opportunities for ALIOR BANK and Dow Jones
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALIOR and Dow is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK 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 ALIOR BANK i.e., ALIOR BANK and Dow Jones go up and down completely randomly.
Pair Corralation between ALIOR BANK and Dow Jones
Assuming the 90 days trading horizon ALIOR BANK is expected to generate 1.21 times less return on investment than Dow Jones. In addition to that, ALIOR BANK is 2.86 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 0.36 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 298,740 from holding Dow Jones Industrial or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ALIOR BANK vs. Dow Jones Industrial
Performance |
| Timeline |
ALIOR BANK and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ALIOR BANK
Pair trading matchups for ALIOR BANK
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ALIOR BANK and Dow Jones
The main advantage of trading using opposite ALIOR BANK and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALIOR BANK 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.| ALIOR BANK vs. TOTAL GABON | ALIOR BANK vs. Walgreens Boots Alliance | ALIOR BANK vs. Peak Resources Limited |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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