Correlation Between AXichem AB and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AXichem AB 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 AXichem AB and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between aXichem AB and Dow Jones Industrial, you can compare the effects of market volatilities on AXichem AB 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 AXichem AB with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXichem AB and Dow Jones.
Diversification Opportunities for AXichem AB and Dow Jones
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AXichem and Dow is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding aXichem AB 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 AXichem AB 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 aXichem AB 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 AXichem AB i.e., AXichem AB and Dow Jones go up and down completely randomly.
Pair Corralation between AXichem AB and Dow Jones
Assuming the 90 days trading horizon aXichem AB is expected to generate 8.82 times more return on investment than Dow Jones. However, AXichem AB is 8.82 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.18 per unit of risk. If you would invest 133.00 in aXichem AB on August 28, 2024 and sell it today you would lose (1.00) from holding aXichem AB or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
aXichem AB vs. Dow Jones Industrial
Performance |
| Timeline |
AXichem AB and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
aXichem AB
Pair trading matchups for AXichem AB
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AXichem AB and Dow Jones
The main advantage of trading using opposite AXichem AB and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXichem AB 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.| AXichem AB vs. Enzymatica publ AB | AXichem AB vs. Bactiguard Holding AB | AXichem AB vs. Cantargia AB | AXichem AB vs. BIMobject AB |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |