Correlation Between Dow Jones and Aalborg Boldspilklub
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Aalborg Boldspilklub 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 Aalborg Boldspilklub 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 Aalborg Boldspilklub AS, you can compare the effects of market volatilities on Dow Jones and Aalborg Boldspilklub 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 Aalborg Boldspilklub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Aalborg Boldspilklub.
Diversification Opportunities for Dow Jones and Aalborg Boldspilklub
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Aalborg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Aalborg Boldspilklub AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalborg Boldspilklub 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 Aalborg Boldspilklub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalborg Boldspilklub has no effect on the direction of Dow Jones i.e., Dow Jones and Aalborg Boldspilklub go up and down completely randomly.
Pair Corralation between Dow Jones and Aalborg Boldspilklub
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.31 times more return on investment than Aalborg Boldspilklub. However, Dow Jones Industrial is 3.18 times less risky than Aalborg Boldspilklub. It trades about 0.07 of its potential returns per unit of risk. Aalborg Boldspilklub AS is currently generating about -0.02 per unit of risk. If you would invest 3,322,080 in Dow Jones Industrial on September 19, 2024 and sell it today you would earn a total of 910,607 from holding Dow Jones Industrial or generate 27.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. Aalborg Boldspilklub AS
Performance |
| Timeline |
Dow Jones and Aalborg Boldspilklub Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Aalborg Boldspilklub AS
Pair trading matchups for Aalborg Boldspilklub
Pair Trading with Dow Jones and Aalborg Boldspilklub
The main advantage of trading using opposite Dow Jones and Aalborg Boldspilklub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Aalborg Boldspilklub 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 Aalborg Boldspilklub will offset losses from the drop in Aalborg Boldspilklub's long position.| Dow Jones vs. Digi International | Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. United Microelectronics | Dow Jones vs. Weibo Corp |
| Aalborg Boldspilklub vs. ISS AS | Aalborg Boldspilklub vs. FLSmidth Co | Aalborg Boldspilklub vs. NKT AS | Aalborg Boldspilklub vs. Ambu AS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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