Correlation Between Amana Income and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Amana Income 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 Amana Income and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Income Fund and Dow Jones Industrial, you can compare the effects of market volatilities on Amana Income 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 Amana Income with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Income and Dow Jones.
Diversification Opportunities for Amana Income and Dow Jones
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amana and Dow is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Amana Income Fund 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 Amana Income 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 Amana Income Fund 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 Amana Income i.e., Amana Income and Dow Jones go up and down completely randomly.
Pair Corralation between Amana Income and Dow Jones
Assuming the 90 days horizon Amana Income Fund is expected to under-perform the Dow Jones. In addition to that, Amana Income is 1.02 times more volatile than Dow Jones Industrial. It trades about -0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.0 per unit of volatility. If you would invest 4,391,098 in Dow Jones Industrial on September 13, 2024 and sell it today you would earn a total of 314.00 from holding Dow Jones Industrial or generate 0.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amana Income Fund vs. Dow Jones Industrial
Performance |
| Timeline |
Amana Income and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Amana Income Fund
Pair trading matchups for Amana Income
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Amana Income and Dow Jones
The main advantage of trading using opposite Amana Income and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Income 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.| Amana Income vs. Amana Growth Fund | Amana Income vs. Amana Developing World | Amana Income vs. Amana Developing World | Amana Income vs. Amana Income Fund |
| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |