Correlation Between Dow Jones and Americafirst Tactical
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Americafirst Tactical 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 Americafirst Tactical 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 Americafirst Tactical Alpha, you can compare the effects of market volatilities on Dow Jones and Americafirst Tactical 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 Americafirst Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Americafirst Tactical.
Diversification Opportunities for Dow Jones and Americafirst Tactical
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Americafirst is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Americafirst Tactical Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Tactical 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 Americafirst Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Tactical has no effect on the direction of Dow Jones i.e., Dow Jones and Americafirst Tactical go up and down completely randomly.
Pair Corralation between Dow Jones and Americafirst Tactical
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.08 times less return on investment than Americafirst Tactical. But when comparing it to its historical volatility, Dow Jones Industrial is 1.55 times less risky than Americafirst Tactical. It trades about 0.27 of its potential returns per unit of risk. Americafirst Tactical Alpha is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Americafirst Tactical Alpha on August 30, 2024 and sell it today you would earn a total of 94.00 from holding Americafirst Tactical Alpha or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Americafirst Tactical Alpha
Performance |
| Timeline |
Dow Jones and Americafirst Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Americafirst Tactical Alpha
Pair trading matchups for Americafirst Tactical
Pair Trading with Dow Jones and Americafirst Tactical
The main advantage of trading using opposite Dow Jones and Americafirst Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Americafirst Tactical 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 Americafirst Tactical will offset losses from the drop in Americafirst Tactical's long position.| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
| Americafirst Tactical vs. California Bond Fund | Americafirst Tactical vs. Bbh Intermediate Municipal | Americafirst Tactical vs. T Rowe Price | Americafirst Tactical vs. Astor Longshort Fund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |