Correlation Between Amadeus IT and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Amadeus IT 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 Amadeus IT and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Group and Dow Jones Industrial, you can compare the effects of market volatilities on Amadeus IT 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 Amadeus IT with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Dow Jones.
Diversification Opportunities for Amadeus IT and Dow Jones
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amadeus and Dow is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT 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 Amadeus IT 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 Amadeus IT 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 Amadeus IT i.e., Amadeus IT and Dow Jones go up and down completely randomly.
Pair Corralation between Amadeus IT and Dow Jones
Assuming the 90 days horizon Amadeus IT Group is expected to under-perform the Dow Jones. In addition to that, Amadeus IT is 3.18 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.36 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 298,740 from holding Dow Jones Industrial or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Amadeus IT Group vs. Dow Jones Industrial
Performance |
| Timeline |
Amadeus IT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Amadeus IT Group
Pair trading matchups for Amadeus IT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Amadeus IT and Dow Jones
The main advantage of trading using opposite Amadeus IT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT 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.| Amadeus IT vs. SosTravel SPA | Amadeus IT vs. Arma Services | Amadeus IT vs. Transat AT | Amadeus IT vs. TUI AG |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |