Correlation Between Dow Jones and Ascelia Pharma
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Ascelia Pharma 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 Ascelia Pharma 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 Ascelia Pharma AB, you can compare the effects of market volatilities on Dow Jones and Ascelia Pharma 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 Ascelia Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Ascelia Pharma.
Diversification Opportunities for Dow Jones and Ascelia Pharma
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Ascelia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Ascelia Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascelia Pharma AB 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 Ascelia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascelia Pharma AB has no effect on the direction of Dow Jones i.e., Dow Jones and Ascelia Pharma go up and down completely randomly.
Pair Corralation between Dow Jones and Ascelia Pharma
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Ascelia Pharma. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 6.54 times less risky than Ascelia Pharma. The index trades about -0.01 of its potential returns per unit of risk. The Ascelia Pharma AB is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Ascelia Pharma AB on September 12, 2024 and sell it today you would earn a total of 51.00 from holding Ascelia Pharma AB or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Ascelia Pharma AB
Performance |
| Timeline |
Dow Jones and Ascelia Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Ascelia Pharma AB
Pair trading matchups for Ascelia Pharma
Pair Trading with Dow Jones and Ascelia Pharma
The main advantage of trading using opposite Dow Jones and Ascelia Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Ascelia Pharma 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 Ascelia Pharma will offset losses from the drop in Ascelia Pharma's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Ascelia Pharma vs. Hansa Biopharma AB | Ascelia Pharma vs. Cantargia AB | Ascelia Pharma vs. Saniona AB | Ascelia Pharma vs. BioArctic AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |