Correlation Between Aboitiz Power and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aboitiz Power 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 Aboitiz Power and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aboitiz Power Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Aboitiz Power 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 Aboitiz Power with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aboitiz Power and Dow Jones.
Diversification Opportunities for Aboitiz Power and Dow Jones
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aboitiz and Dow is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aboitiz Power Corp 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 Aboitiz Power 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 Aboitiz Power Corp 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 Aboitiz Power i.e., Aboitiz Power and Dow Jones go up and down completely randomly.
Pair Corralation between Aboitiz Power and Dow Jones
Assuming the 90 days trading horizon Aboitiz Power Corp is expected to generate 1.66 times more return on investment than Dow Jones. However, Aboitiz Power is 1.66 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 3,770 in Aboitiz Power Corp on October 20, 2024 and sell it today you would earn a total of 175.00 from holding Aboitiz Power Corp or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Aboitiz Power Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Aboitiz Power and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aboitiz Power Corp
Pair trading matchups for Aboitiz Power
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aboitiz Power and Dow Jones
The main advantage of trading using opposite Aboitiz Power and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aboitiz Power 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.| Aboitiz Power vs. Suntrust Home Developers | Aboitiz Power vs. Philex Mining Corp | Aboitiz Power vs. Converge Information Communications | Aboitiz Power vs. Top Frontier Investment |
| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| 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 |