Correlation Between AbraSilver Resource and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AbraSilver Resource 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 AbraSilver Resource and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbraSilver Resource Corp and Dow Jones Industrial, you can compare the effects of market volatilities on AbraSilver Resource 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 AbraSilver Resource with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbraSilver Resource and Dow Jones.
Diversification Opportunities for AbraSilver Resource and Dow Jones
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AbraSilver and Dow is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp 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 AbraSilver Resource 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 AbraSilver Resource Corp 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 AbraSilver Resource i.e., AbraSilver Resource and Dow Jones go up and down completely randomly.
Pair Corralation between AbraSilver Resource and Dow Jones
Assuming the 90 days horizon AbraSilver Resource Corp is expected to generate 5.0 times more return on investment than Dow Jones. However, AbraSilver Resource is 5.0 times more volatile than Dow Jones Industrial. It trades about 0.05 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 171.00 in AbraSilver Resource Corp on September 1, 2024 and sell it today you would earn a total of 25.00 from holding AbraSilver Resource Corp or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AbraSilver Resource Corp vs. Dow Jones Industrial
Performance |
| Timeline |
AbraSilver Resource and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AbraSilver Resource Corp
Pair trading matchups for AbraSilver Resource
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AbraSilver Resource and Dow Jones
The main advantage of trading using opposite AbraSilver Resource and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbraSilver Resource 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.| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. HUMANA INC | AbraSilver Resource vs. SCOR PK | AbraSilver Resource vs. Aquagold International |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Correlations Find global opportunities by holding instruments from different markets |