Correlation Between ASA Gold and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ASA Gold 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 ASA Gold and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASA Gold and and Dow Jones Industrial, you can compare the effects of market volatilities on ASA Gold 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 ASA Gold with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASA Gold and Dow Jones.
Diversification Opportunities for ASA Gold and Dow Jones
Very good diversification
The 3 months correlation between ASA and Dow is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ASA Gold and 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 ASA Gold 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 ASA Gold and 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 ASA Gold i.e., ASA Gold and Dow Jones go up and down completely randomly.
Pair Corralation between ASA Gold and Dow Jones
Considering the 90-day investment horizon ASA Gold and is expected to generate 2.5 times more return on investment than Dow Jones. However, ASA Gold is 2.5 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 1,515 in ASA Gold and on September 19, 2024 and sell it today you would earn a total of 511.00 from holding ASA Gold and or generate 33.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASA Gold and vs. Dow Jones Industrial
Performance |
| Timeline |
ASA Gold and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ASA Gold and
Pair trading matchups for ASA Gold
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ASA Gold and Dow Jones
The main advantage of trading using opposite ASA Gold and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASA Gold 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.The idea behind ASA Gold and and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Mangazeya Mining | Dow Jones vs. Summit Materials | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. AMCON Distributing |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |