Correlation Between APS Energia and Dow Jones
Can any of the company-specific risk be diversified away by investing in both APS Energia 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 APS Energia and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APS Energia SA and Dow Jones Industrial, you can compare the effects of market volatilities on APS Energia 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 APS Energia with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of APS Energia and Dow Jones.
Diversification Opportunities for APS Energia and Dow Jones
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between APS and Dow is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding APS Energia SA 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 APS Energia 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 APS Energia SA 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 APS Energia i.e., APS Energia and Dow Jones go up and down completely randomly.
Pair Corralation between APS Energia and Dow Jones
Assuming the 90 days trading horizon APS Energia SA is expected to generate 3.3 times more return on investment than Dow Jones. However, APS Energia is 3.3 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of risk. If you would invest 235.00 in APS Energia SA on August 26, 2024 and sell it today you would earn a total of 11.00 from holding APS Energia SA or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
APS Energia SA vs. Dow Jones Industrial
Performance |
| Timeline |
APS Energia and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
APS Energia SA
Pair trading matchups for APS Energia
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with APS Energia and Dow Jones
The main advantage of trading using opposite APS Energia and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APS Energia 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.| APS Energia vs. True Games Syndicate | APS Energia vs. Carlson Investments SA | APS Energia vs. CI Games SA | APS Energia vs. Saule Technologies SA |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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