Correlation Between Dow Jones and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Aurion Resources 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 Aurion Resources 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 Aurion Resources, you can compare the effects of market volatilities on Dow Jones and Aurion Resources 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 Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Aurion Resources.
Diversification Opportunities for Dow Jones and Aurion Resources
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Aurion is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources 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 Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Dow Jones i.e., Dow Jones and Aurion Resources go up and down completely randomly.
Pair Corralation between Dow Jones and Aurion Resources
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.26 times more return on investment than Aurion Resources. However, Dow Jones Industrial is 3.78 times less risky than Aurion Resources. It trades about 0.19 of its potential returns per unit of risk. Aurion Resources is currently generating about -0.2 per unit of risk. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 178,156 from holding Dow Jones Industrial or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Aurion Resources
Performance |
| Timeline |
Dow Jones and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Aurion Resources
Pair trading matchups for Aurion Resources
Pair Trading with Dow Jones and Aurion Resources
The main advantage of trading using opposite Dow Jones and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Aurion Resources 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 Aurion Resources will offset losses from the drop in Aurion Resources' 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 |
| Aurion Resources vs. Ascendant Resources | Aurion Resources vs. Cantex Mine Development | Aurion Resources vs. Amarc Resources | Aurion Resources vs. Sterling Metals Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |