Correlation Between Dow Jones and Accolade
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Accolade 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 Accolade 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 Accolade, you can compare the effects of market volatilities on Dow Jones and Accolade 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 Accolade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Accolade.
Diversification Opportunities for Dow Jones and Accolade
Excellent diversification
The 3 months correlation between Dow and Accolade is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade 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 Accolade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accolade has no effect on the direction of Dow Jones i.e., Dow Jones and Accolade go up and down completely randomly.
Pair Corralation between Dow Jones and Accolade
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.76 times less return on investment than Accolade. But when comparing it to its historical volatility, Dow Jones Industrial is 3.12 times less risky than Accolade. It trades about 0.19 of its potential returns per unit of risk. Accolade is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Accolade on August 24, 2024 and sell it today you would earn a total of 51.00 from holding Accolade or generate 15.94% 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. Accolade
Performance |
| Timeline |
Dow Jones and Accolade Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Accolade
Pair trading matchups for Accolade
Pair Trading with Dow Jones and Accolade
The main advantage of trading using opposite Dow Jones and Accolade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Accolade 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 Accolade will offset losses from the drop in Accolade's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Accolade vs. Privia Health Group | Accolade vs. HealthStream | Accolade vs. National Research Corp | Accolade vs. Health Catalyst |
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..
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