Correlation Between Aerodrome and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aerodrome 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 Aerodrome and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerodrome Group and Dow Jones Industrial, you can compare the effects of market volatilities on Aerodrome 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 Aerodrome with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerodrome and Dow Jones.
Diversification Opportunities for Aerodrome and Dow Jones
Weak diversification
The 3 months correlation between Aerodrome and Dow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aerodrome Group 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 Aerodrome 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 Aerodrome Group 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 Aerodrome i.e., Aerodrome and Dow Jones go up and down completely randomly.
Pair Corralation between Aerodrome and Dow Jones
Assuming the 90 days trading horizon Aerodrome Group is expected to under-perform the Dow Jones. In addition to that, Aerodrome is 7.23 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of volatility. If you would invest 4,211,440 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 218,211 from holding Dow Jones Industrial or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Aerodrome Group vs. Dow Jones Industrial
Performance |
| Timeline |
Aerodrome and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aerodrome Group
Pair trading matchups for Aerodrome
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aerodrome and Dow Jones
The main advantage of trading using opposite Aerodrome and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerodrome 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.| Aerodrome vs. Hiron Trade Investments Industrial | Aerodrome vs. Analyst IMS Investment | Aerodrome vs. GODM Investments | Aerodrome vs. Libra Insurance |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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