Correlation Between Abrdn ETFs and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Abrdn ETFs 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 Abrdn ETFs and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn ETFs and Dow Jones Industrial, you can compare the effects of market volatilities on Abrdn ETFs 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 Abrdn ETFs with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn ETFs and Dow Jones.
Diversification Opportunities for Abrdn ETFs and Dow Jones
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Abrdn and Dow is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding abrdn ETFs 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 Abrdn ETFs 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 abrdn ETFs 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 Abrdn ETFs i.e., Abrdn ETFs and Dow Jones go up and down completely randomly.
Pair Corralation between Abrdn ETFs and Dow Jones
Given the investment horizon of 90 days abrdn ETFs is expected to under-perform the Dow Jones. In addition to that, Abrdn ETFs is 1.61 times more volatile than Dow Jones Industrial. It trades about -0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,885,286 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 544,365 from holding Dow Jones Industrial or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
abrdn ETFs vs. Dow Jones Industrial
Performance |
| Timeline |
Abrdn ETFs and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
abrdn ETFs
Pair trading matchups for Abrdn ETFs
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Abrdn ETFs and Dow Jones
The main advantage of trading using opposite Abrdn ETFs and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn ETFs 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.| Abrdn ETFs vs. Aquagold International | Abrdn ETFs vs. Morningstar Unconstrained Allocation | Abrdn ETFs vs. High Yield Municipal Fund | Abrdn ETFs vs. Thrivent High Yield |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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