Correlation Between Dow Jones and Antec
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Antec 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 Antec 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 Antec Inc, you can compare the effects of market volatilities on Dow Jones and Antec 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 Antec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Antec.
Diversification Opportunities for Dow Jones and Antec
Excellent diversification
The 3 months correlation between Dow and Antec is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Antec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antec Inc 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 Antec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antec Inc has no effect on the direction of Dow Jones i.e., Dow Jones and Antec go up and down completely randomly.
Pair Corralation between Dow Jones and Antec
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.64 times more return on investment than Antec. However, Dow Jones Industrial is 1.56 times less risky than Antec. It trades about 0.26 of its potential returns per unit of risk. Antec Inc is currently generating about -0.45 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Antec Inc
Performance |
| Timeline |
Dow Jones and Antec Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Antec Inc
Pair trading matchups for Antec
Pair Trading with Dow Jones and Antec
The main advantage of trading using opposite Dow Jones and Antec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Antec 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 Antec will offset losses from the drop in Antec's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Antec vs. AVer Information | Antec vs. Dimerco Data System | Antec vs. U Media Communications | Antec vs. Otsuka Information Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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