Correlation Between Atmus Filtration and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Atmus Filtration 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 Atmus Filtration and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmus Filtration Technologies and Dow Jones Industrial, you can compare the effects of market volatilities on Atmus Filtration 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 Atmus Filtration with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmus Filtration and Dow Jones.
Diversification Opportunities for Atmus Filtration and Dow Jones
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Atmus and Dow is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Atmus Filtration Technologies 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 Atmus Filtration 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 Atmus Filtration Technologies 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 Atmus Filtration i.e., Atmus Filtration and Dow Jones go up and down completely randomly.
Pair Corralation between Atmus Filtration and Dow Jones
Given the investment horizon of 90 days Atmus Filtration Technologies is expected to generate 2.31 times more return on investment than Dow Jones. However, Atmus Filtration is 2.31 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 3,894 in Atmus Filtration Technologies on August 30, 2024 and sell it today you would earn a total of 412.00 from holding Atmus Filtration Technologies or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmus Filtration Technologies vs. Dow Jones Industrial
Performance |
| Timeline |
Atmus Filtration and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Atmus Filtration Technologies
Pair trading matchups for Atmus Filtration
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Atmus Filtration and Dow Jones
The main advantage of trading using opposite Atmus Filtration and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmus Filtration 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.| Atmus Filtration vs. BCE Inc | Atmus Filtration vs. Barrick Gold Corp | Atmus Filtration vs. Yuexiu Transport Infrastructure | Atmus Filtration vs. Chester Mining |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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