Correlation Between Dow Jones and Absa Multi
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By analyzing existing cross correlation between Dow Jones Industrial and Absa Multi Managed, you can compare the effects of market volatilities on Dow Jones and Absa Multi 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 Dow Jones with a short position of Absa Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Absa Multi.
Diversification Opportunities for Dow Jones and Absa Multi
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Absa is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Absa Multi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Multi Managed and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Absa Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Multi Managed has no effect on the direction of Dow Jones i.e., Dow Jones and Absa Multi go up and down completely randomly.
Pair Corralation between Dow Jones and Absa Multi
Assuming the 90 days trading horizon Dow Jones is expected to generate 40.12 times less return on investment than Absa Multi. In addition to that, Dow Jones is 1.65 times more volatile than Absa Multi Managed. It trades about 0.0 of its total potential returns per unit of risk. Absa Multi Managed is currently generating about 0.21 per unit of volatility. If you would invest 255.00 in Absa Multi Managed on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Absa Multi Managed or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Absa Multi Managed
Performance |
| Timeline |
Dow Jones and Absa Multi Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Absa Multi Managed
Pair trading matchups for Absa Multi
Pair Trading with Dow Jones and Absa Multi
The main advantage of trading using opposite Dow Jones and Absa Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Absa Multi 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 Absa Multi will offset losses from the drop in Absa Multi's long position.| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
| Absa Multi vs. Absa Multi managed Absolute | Absa Multi vs. Absa Prudential | Absa Multi vs. Absa Multi Managed | Absa Multi vs. Absa Multi Managed |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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