Correlation Between Ab Large and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ab Large 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 Ab Large and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Large Cap and Dow Jones Industrial, you can compare the effects of market volatilities on Ab Large 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 Ab Large with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Large and Dow Jones.
Diversification Opportunities for Ab Large and Dow Jones
Almost no diversification
The 3 months correlation between APGAX and Dow is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ab Large Cap 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 Ab Large 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 Ab Large Cap 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 Ab Large i.e., Ab Large and Dow Jones go up and down completely randomly.
Pair Corralation between Ab Large and Dow Jones
Assuming the 90 days horizon Ab Large is expected to generate 1.87 times less return on investment than Dow Jones. In addition to that, Ab Large is 1.12 times more volatile than Dow Jones Industrial. It trades about 0.09 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 Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ab Large Cap vs. Dow Jones Industrial
Performance |
| Timeline |
Ab Large and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ab Large Cap
Pair trading matchups for Ab Large
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ab Large and Dow Jones
The main advantage of trading using opposite Ab Large and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Large 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.| Ab Large vs. Ab Sustainable Global | Ab Large vs. Ab Relative Value | Ab Large vs. Ab Growth Fund | Ab Large vs. Ab Small Cap |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |