Correlation Between Aurea SA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aurea SA 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 Aurea SA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurea SA and Dow Jones Industrial, you can compare the effects of market volatilities on Aurea SA 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 Aurea SA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurea SA and Dow Jones.
Diversification Opportunities for Aurea SA and Dow Jones
Good diversification
The 3 months correlation between Aurea and Dow is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aurea SA 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 Aurea SA 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 Aurea SA 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 Aurea SA i.e., Aurea SA and Dow Jones go up and down completely randomly.
Pair Corralation between Aurea SA and Dow Jones
Assuming the 90 days trading horizon Aurea SA is expected to generate 4.4 times more return on investment than Dow Jones. However, Aurea SA is 4.4 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 520.00 in Aurea SA on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Aurea SA or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Aurea SA vs. Dow Jones Industrial
Performance |
| Timeline |
Aurea SA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aurea SA
Pair trading matchups for Aurea SA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aurea SA and Dow Jones
The main advantage of trading using opposite Aurea SA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurea SA 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.| Aurea SA vs. Veolia Environnement VE | Aurea SA vs. Derichebourg | Aurea SA vs. Seche Environnem | Aurea SA vs. Groupe Pizzorno Environnement |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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