Correlation Between AD Plastik and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AD Plastik 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 AD Plastik and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AD Plastik dd and Dow Jones Industrial, you can compare the effects of market volatilities on AD Plastik 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 AD Plastik with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AD Plastik and Dow Jones.
Diversification Opportunities for AD Plastik and Dow Jones
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ADPL and Dow is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding AD Plastik dd 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 AD Plastik 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 AD Plastik dd 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 AD Plastik i.e., AD Plastik and Dow Jones go up and down completely randomly.
Pair Corralation between AD Plastik and Dow Jones
Assuming the 90 days trading horizon AD Plastik dd is expected to under-perform the Dow Jones. In addition to that, AD Plastik is 3.05 times more volatile than Dow Jones Industrial. It trades about -0.35 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of volatility. If you would invest 4,395,819 in Dow Jones Industrial on September 14, 2024 and sell it today you would lose (4,407) from holding Dow Jones Industrial or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
AD Plastik dd vs. Dow Jones Industrial
Performance |
| Timeline |
AD Plastik and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AD Plastik dd
Pair trading matchups for AD Plastik
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AD Plastik and Dow Jones
The main advantage of trading using opposite AD Plastik and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AD Plastik 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.| AD Plastik vs. Hrvatska Postanska Banka | AD Plastik vs. Dalekovod dd | AD Plastik vs. Podravka Prehrambena Industrija | AD Plastik vs. Adris Grupa dd |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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