Correlation Between Associated Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Dow Jones Industrial, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Dow Jones.
Diversification Opportunities for Associated Capital and Dow Jones
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Associated and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group 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 Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Associated Capital and Dow Jones
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the Dow Jones. In addition to that, Associated Capital is 2.32 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 0.07 per unit of volatility. If you would invest 3,394,710 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 992,325 from holding Dow Jones Industrial or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Dow Jones Industrial
Performance |
| Timeline |
Associated Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Associated Capital Group
Pair trading matchups for Associated Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Associated Capital and Dow Jones
The main advantage of trading using opposite Associated Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |