Correlation Between Athena Technology and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Athena Technology 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 Athena Technology and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athena Technology Acquisition and Dow Jones Industrial, you can compare the effects of market volatilities on Athena Technology 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 Athena Technology with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athena Technology and Dow Jones.
Diversification Opportunities for Athena Technology and Dow Jones
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Athena and Dow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Athena Technology Acquisition 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 Athena Technology 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 Athena Technology Acquisition 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 Athena Technology i.e., Athena Technology and Dow Jones go up and down completely randomly.
Pair Corralation between Athena Technology and Dow Jones
Given the investment horizon of 90 days Athena Technology is expected to generate 3.23 times less return on investment than Dow Jones. In addition to that, Athena Technology is 3.08 times more volatile than Dow Jones Industrial. It trades about 0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of volatility. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athena Technology Acquisition vs. Dow Jones Industrial
Performance |
| Timeline |
Athena Technology and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Athena Technology Acquisition
Pair trading matchups for Athena Technology
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Athena Technology and Dow Jones
The main advantage of trading using opposite Athena Technology and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athena Technology 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.| Athena Technology vs. Alpha Star Acquisition | Athena Technology vs. Alpha One | Athena Technology vs. A SPAC II |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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