Correlation Between A10 Network and Dow Jones
Can any of the company-specific risk be diversified away by investing in both A10 Network 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 A10 Network and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A10 Network and Dow Jones Industrial, you can compare the effects of market volatilities on A10 Network 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 A10 Network with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Dow Jones.
Diversification Opportunities for A10 Network and Dow Jones
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between A10 and Dow is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network 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 A10 Network 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 A10 Network 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 A10 Network i.e., A10 Network and Dow Jones go up and down completely randomly.
Pair Corralation between A10 Network and Dow Jones
Given the investment horizon of 90 days A10 Network is expected to generate 3.25 times more return on investment than Dow Jones. However, A10 Network is 3.25 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1,442 in A10 Network on November 26, 2024 and sell it today you would earn a total of 574.00 from holding A10 Network or generate 39.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
A10 Network vs. Dow Jones Industrial
Performance |
Timeline |
A10 Network and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
A10 Network
Pair trading matchups for A10 Network
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with A10 Network and Dow Jones
The main advantage of trading using opposite A10 Network and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network 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.A10 Network vs. Evertec | ||
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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