Correlation Between ADDvantage Technologies and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ADDvantage Technologies 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 ADDvantage Technologies and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDvantage Technologies Group and Dow Jones Industrial, you can compare the effects of market volatilities on ADDvantage Technologies 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 ADDvantage Technologies with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDvantage Technologies and Dow Jones.
Diversification Opportunities for ADDvantage Technologies and Dow Jones
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ADDvantage and Dow is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ADDvantage Technologies 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 ADDvantage Technologies 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 ADDvantage Technologies 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 ADDvantage Technologies i.e., ADDvantage Technologies and Dow Jones go up and down completely randomly.
Pair Corralation between ADDvantage Technologies and Dow Jones
If you would invest 4,195,424 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 275,129 from holding Dow Jones Industrial or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.38% |
| Values | Daily Returns |
ADDvantage Technologies Group vs. Dow Jones Industrial
Performance |
| Timeline |
ADDvantage Technologies and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ADDvantage Technologies Group
Pair trading matchups for ADDvantage Technologies
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ADDvantage Technologies and Dow Jones
The main advantage of trading using opposite ADDvantage Technologies and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDvantage Technologies 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.| ADDvantage Technologies vs. PC Connection | ADDvantage Technologies vs. Avnet Inc | ADDvantage Technologies vs. Climb Global Solutions | ADDvantage Technologies vs. ScanSource |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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