Correlation Between Dow Jones and Annexin Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Annexin Pharmaceuticals 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 Annexin Pharmaceuticals 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 Annexin Pharmaceuticals AB, you can compare the effects of market volatilities on Dow Jones and Annexin Pharmaceuticals 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 Annexin Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Annexin Pharmaceuticals.
Diversification Opportunities for Dow Jones and Annexin Pharmaceuticals
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Annexin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Annexin Pharmaceuticals AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annexin Pharmaceuticals 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 Annexin Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annexin Pharmaceuticals has no effect on the direction of Dow Jones i.e., Dow Jones and Annexin Pharmaceuticals go up and down completely randomly.
Pair Corralation between Dow Jones and Annexin Pharmaceuticals
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.12 times more return on investment than Annexin Pharmaceuticals. However, Dow Jones Industrial is 8.3 times less risky than Annexin Pharmaceuticals. It trades about 0.08 of its potential returns per unit of risk. Annexin Pharmaceuticals AB is currently generating about 0.01 per unit of risk. If you would invest 3,410,864 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,080,201 from holding Dow Jones Industrial or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Dow Jones Industrial vs. Annexin Pharmaceuticals AB
Performance |
| Timeline |
Dow Jones and Annexin Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Annexin Pharmaceuticals AB
Pair trading matchups for Annexin Pharmaceuticals
Pair Trading with Dow Jones and Annexin Pharmaceuticals
The main advantage of trading using opposite Dow Jones and Annexin Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Annexin Pharmaceuticals 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 Annexin Pharmaceuticals will offset losses from the drop in Annexin Pharmaceuticals' long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Annexin Pharmaceuticals vs. Cantargia AB | Annexin Pharmaceuticals vs. Biovica International AB | Annexin Pharmaceuticals vs. Ascelia Pharma AB | Annexin Pharmaceuticals vs. Cyxone 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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