Correlation Between Dow Jones and A1KA34
Can any of the company-specific risk be diversified away by investing in both Dow Jones and A1KA34 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 A1KA34 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 A1KA34, you can compare the effects of market volatilities on Dow Jones and A1KA34 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 A1KA34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and A1KA34.
Diversification Opportunities for Dow Jones and A1KA34
Average diversification
The 3 months correlation between Dow and A1KA34 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and A1KA34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A1KA34 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 A1KA34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A1KA34 has no effect on the direction of Dow Jones i.e., Dow Jones and A1KA34 go up and down completely randomly.
Pair Corralation between Dow Jones and A1KA34
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.04 times less return on investment than A1KA34. But when comparing it to its historical volatility, Dow Jones Industrial is 2.4 times less risky than A1KA34. It trades about 0.08 of its potential returns per unit of risk. A1KA34 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,879 in A1KA34 on September 13, 2024 and sell it today you would earn a total of 1,011 from holding A1KA34 or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. A1KA34
Performance |
| Timeline |
Dow Jones and A1KA34 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
A1KA34
Pair trading matchups for A1KA34
Pair Trading with Dow Jones and A1KA34
The main advantage of trading using opposite Dow Jones and A1KA34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, A1KA34 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 A1KA34 will offset losses from the drop in A1KA34'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 |
| A1KA34 vs. The Home Depot | A1KA34 vs. Tres Tentos Agroindustrial | A1KA34 vs. salesforce inc | A1KA34 vs. Apartment Investment and |
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..
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |