Correlation Between Dow Jones and Agile Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Agile Group 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 Agile Group 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 Agile Group Holdings, you can compare the effects of market volatilities on Dow Jones and Agile Group 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 Agile Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Agile Group.
Diversification Opportunities for Dow Jones and Agile Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Agile is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Agile Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Group Holdings 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 Agile Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Group Holdings has no effect on the direction of Dow Jones i.e., Dow Jones and Agile Group go up and down completely randomly.
Pair Corralation between Dow Jones and Agile Group
Assuming the 90 days trading horizon Dow Jones is expected to generate 7.57 times less return on investment than Agile Group. But when comparing it to its historical volatility, Dow Jones Industrial is 29.22 times less risky than Agile Group. It trades about 0.12 of its potential returns per unit of risk. Agile Group Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Agile Group Holdings on September 1, 2024 and sell it today you would lose (610.00) from holding Agile Group Holdings or give up 55.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Agile Group Holdings
Performance |
| Timeline |
Dow Jones and Agile Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Agile Group Holdings
Pair trading matchups for Agile Group
Pair Trading with Dow Jones and Agile Group
The main advantage of trading using opposite Dow Jones and Agile Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Agile Group 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 Agile Group will offset losses from the drop in Agile Group's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Agile Group vs. China Resources Land | Agile Group vs. Sun Hung Kai | Agile Group vs. China Overseas Land | Agile Group vs. EGRNF |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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