Correlation Between Dow Jones and Amcor Plc
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Amcor Plc 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 Dow Jones and Amcor Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Amcor plc, you can compare the effects of market volatilities on Dow Jones and Amcor Plc 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 Amcor Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Amcor Plc.
Diversification Opportunities for Dow Jones and Amcor Plc
Average diversification
The 3 months correlation between Dow and Amcor is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Amcor plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcor plc 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 Amcor Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcor plc has no effect on the direction of Dow Jones i.e., Dow Jones and Amcor Plc go up and down completely randomly.
Pair Corralation between Dow Jones and Amcor Plc
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.36 times more return on investment than Amcor Plc. However, Dow Jones Industrial is 2.79 times less risky than Amcor Plc. It trades about 0.16 of its potential returns per unit of risk. Amcor plc is currently generating about 0.02 per unit of risk. If you would invest 4,109,677 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 305,179 from holding Dow Jones Industrial or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Amcor plc
Performance |
| Timeline |
Dow Jones and Amcor Plc Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Amcor plc
Pair trading matchups for Amcor Plc
Pair Trading with Dow Jones and Amcor Plc
The main advantage of trading using opposite Dow Jones and Amcor Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Amcor Plc 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 Amcor Plc will offset losses from the drop in Amcor Plc's long position.| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
| Amcor Plc vs. THAI BEVERAGE | Amcor Plc vs. SCANSOURCE | Amcor Plc vs. DATANG INTL POW | Amcor Plc vs. National Storage Affiliates |
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 CEOs Directory module to screen CEOs from public companies around the world.
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