Correlation Between Dow Jones and AIMA Technology
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By analyzing existing cross correlation between Dow Jones Industrial and AIMA Technology Group, you can compare the effects of market volatilities on Dow Jones and AIMA Technology 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 AIMA Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AIMA Technology.
Diversification Opportunities for Dow Jones and AIMA Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and AIMA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AIMA Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIMA Technology Group 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 AIMA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIMA Technology Group has no effect on the direction of Dow Jones i.e., Dow Jones and AIMA Technology go up and down completely randomly.
Pair Corralation between Dow Jones and AIMA Technology
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.34 times more return on investment than AIMA Technology. However, Dow Jones Industrial is 2.93 times less risky than AIMA Technology. It trades about 0.37 of its potential returns per unit of risk. AIMA Technology Group is currently generating about 0.12 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. AIMA Technology Group
Performance |
| Timeline |
Dow Jones and AIMA Technology Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AIMA Technology Group
Pair trading matchups for AIMA Technology
Pair Trading with Dow Jones and AIMA Technology
The main advantage of trading using opposite Dow Jones and AIMA Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, AIMA Technology 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 AIMA Technology will offset losses from the drop in AIMA Technology's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| AIMA Technology vs. China State Construction | AIMA Technology vs. China Merchants Shekou | AIMA Technology vs. Huafa Industrial Co | AIMA Technology vs. China International Capital |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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