Correlation Between Dow Jones and Americann
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Americann 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 Americann 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 Americann, you can compare the effects of market volatilities on Dow Jones and Americann 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 Americann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Americann.
Diversification Opportunities for Dow Jones and Americann
Very good diversification
The 3 months correlation between Dow and Americann is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Americann in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americann 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 Americann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americann has no effect on the direction of Dow Jones i.e., Dow Jones and Americann go up and down completely randomly.
Pair Corralation between Dow Jones and Americann
Assuming the 90 days trading horizon Dow Jones is expected to generate 7.76 times less return on investment than Americann. But when comparing it to its historical volatility, Dow Jones Industrial is 25.05 times less risky than Americann. It trades about 0.13 of its potential returns per unit of risk. Americann is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Americann on September 2, 2024 and sell it today you would lose (12.00) from holding Americann or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Dow Jones Industrial vs. Americann
Performance |
| Timeline |
Dow Jones and Americann Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Americann
Pair trading matchups for Americann
Pair Trading with Dow Jones and Americann
The main advantage of trading using opposite Dow Jones and Americann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Americann 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 Americann will offset losses from the drop in Americann's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Americann vs. Seychelle Environmtl | Americann vs. Energy and Water | Americann vs. One World Universe | Americann vs. Vow ASA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |