Correlation Between Dow Jones and Altshuler Shaham
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Altshuler Shaham 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 Altshuler Shaham 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 Altshuler Shaham Financial, you can compare the effects of market volatilities on Dow Jones and Altshuler Shaham 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 Altshuler Shaham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Altshuler Shaham.
Diversification Opportunities for Dow Jones and Altshuler Shaham
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Altshuler is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Altshuler Shaham Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altshuler Shaham Fin 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 Altshuler Shaham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altshuler Shaham Fin has no effect on the direction of Dow Jones i.e., Dow Jones and Altshuler Shaham go up and down completely randomly.
Pair Corralation between Dow Jones and Altshuler Shaham
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.36 times more return on investment than Altshuler Shaham. However, Dow Jones Industrial is 2.75 times less risky than Altshuler Shaham. It trades about 0.07 of its potential returns per unit of risk. Altshuler Shaham Financial is currently generating about -0.44 per unit of risk. If you would invest 4,338,960 in Dow Jones Industrial on September 18, 2024 and sell it today you would earn a total of 32,788 from holding Dow Jones Industrial or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Altshuler Shaham Financial
Performance |
| Timeline |
Dow Jones and Altshuler Shaham Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Altshuler Shaham Financial
Pair trading matchups for Altshuler Shaham
Pair Trading with Dow Jones and Altshuler Shaham
The main advantage of trading using opposite Dow Jones and Altshuler Shaham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Altshuler Shaham 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 Altshuler Shaham will offset losses from the drop in Altshuler Shaham's long position.| Dow Jones vs. Commonwealth Bank of | Dow Jones vs. AmTrust Financial Services | Dow Jones vs. Forsys Metals Corp | Dow Jones vs. Juniata Valley Financial |
| Altshuler Shaham vs. Meitav Dash Investments | Altshuler Shaham vs. Mivtach Shamir | Altshuler Shaham vs. YD More Investments | Altshuler Shaham vs. Analyst IMS Investment |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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