Correlation Between Aptus Drawdown and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown 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 Aptus Drawdown and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptus Drawdown Managed and Dow Jones Industrial, you can compare the effects of market volatilities on Aptus Drawdown 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 Aptus Drawdown with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and Dow Jones.
Diversification Opportunities for Aptus Drawdown and Dow Jones
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aptus and Dow is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed 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 Aptus Drawdown 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 Aptus Drawdown Managed 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 Aptus Drawdown i.e., Aptus Drawdown and Dow Jones go up and down completely randomly.
Pair Corralation between Aptus Drawdown and Dow Jones
Given the investment horizon of 90 days Aptus Drawdown Managed is expected to generate 0.94 times more return on investment than Dow Jones. However, Aptus Drawdown Managed is 1.07 times less risky than Dow Jones. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.13 per unit of risk. If you would invest 3,684 in Aptus Drawdown Managed on August 24, 2024 and sell it today you would earn a total of 1,061 from holding Aptus Drawdown Managed or generate 28.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptus Drawdown Managed vs. Dow Jones Industrial
Performance |
| Timeline |
Aptus Drawdown and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aptus Drawdown Managed
Pair trading matchups for Aptus Drawdown
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aptus Drawdown and Dow Jones
The main advantage of trading using opposite Aptus Drawdown and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown 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.| Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus Small Cap |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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