Correlation Between Acerinox and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Acerinox 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 Acerinox and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox SA ADR and Dow Jones Industrial, you can compare the effects of market volatilities on Acerinox 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 Acerinox with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Dow Jones.
Diversification Opportunities for Acerinox and Dow Jones
Very good diversification
The 3 months correlation between Acerinox and Dow is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox SA ADR 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 Acerinox 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 Acerinox SA ADR 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 Acerinox i.e., Acerinox and Dow Jones go up and down completely randomly.
Pair Corralation between Acerinox and Dow Jones
Assuming the 90 days horizon Acerinox SA ADR is expected to under-perform the Dow Jones. In addition to that, Acerinox is 2.46 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of volatility. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 178,156 from holding Dow Jones Industrial or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Acerinox SA ADR vs. Dow Jones Industrial
Performance |
| Timeline |
Acerinox and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Acerinox SA ADR
Pair trading matchups for Acerinox
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Acerinox and Dow Jones
The main advantage of trading using opposite Acerinox and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox 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.| Acerinox vs. Algoma Steel Group | Acerinox vs. Synalloy | Acerinox vs. Algoma Steel Group | Acerinox vs. Aperam PK |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |