Correlation Between AXIS Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AXIS Capital 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 AXIS Capital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXIS Capital Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on AXIS Capital 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 AXIS Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXIS Capital and Dow Jones.
Diversification Opportunities for AXIS Capital and Dow Jones
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AXIS and Dow is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AXIS Capital Holdings 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 AXIS Capital 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 AXIS Capital Holdings 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 AXIS Capital i.e., AXIS Capital and Dow Jones go up and down completely randomly.
Pair Corralation between AXIS Capital and Dow Jones
Considering the 90-day investment horizon AXIS Capital Holdings is expected to generate 1.61 times more return on investment than Dow Jones. However, AXIS Capital is 1.61 times more volatile than Dow Jones Industrial. It trades about 0.37 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 8,076 in AXIS Capital Holdings on August 28, 2024 and sell it today you would earn a total of 1,047 from holding AXIS Capital Holdings or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AXIS Capital Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
AXIS Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AXIS Capital Holdings
Pair trading matchups for AXIS Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AXIS Capital and Dow Jones
The main advantage of trading using opposite AXIS Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXIS Capital 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.| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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