Correlation Between Amarin PLC and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Amarin PLC 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 Amarin PLC and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amarin PLC and Dow Jones Industrial, you can compare the effects of market volatilities on Amarin PLC 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 Amarin PLC with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarin PLC and Dow Jones.
Diversification Opportunities for Amarin PLC and Dow Jones
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amarin and Dow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amarin PLC 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 Amarin PLC 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 Amarin PLC 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 Amarin PLC i.e., Amarin PLC and Dow Jones go up and down completely randomly.
Pair Corralation between Amarin PLC and Dow Jones
Given the investment horizon of 90 days Amarin PLC is expected to under-perform the Dow Jones. In addition to that, Amarin PLC is 6.55 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 0.09 per unit of volatility. If you would invest 3,265,670 in Dow Jones Industrial on November 19, 2024 and sell it today you would earn a total of 1,188,938 from holding Dow Jones Industrial or generate 36.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amarin PLC vs. Dow Jones Industrial
Performance |
| Timeline |
Amarin PLC and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Amarin PLC
Pair trading matchups for Amarin PLC
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Amarin PLC and Dow Jones
The main advantage of trading using opposite Amarin PLC and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarin PLC 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.| Amarin PLC vs. Scilex Holding | Amarin PLC vs. Biogen Inc | Amarin PLC vs. Gilead Sciences | Amarin PLC vs. AstraZeneca PLC ADR |
| Dow Jones vs. National CineMedia | Dow Jones vs. Emerson Radio | Dow Jones vs. Space Communication | Dow Jones vs. JD Sports Fashion |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |