Correlation Between Dow Jones and Amundi Nasdaq
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Amundi Nasdaq 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 Amundi Nasdaq 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 Amundi Nasdaq 100 UCITS, you can compare the effects of market volatilities on Dow Jones and Amundi Nasdaq 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 Amundi Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Amundi Nasdaq.
Diversification Opportunities for Dow Jones and Amundi Nasdaq
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and Amundi is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Amundi Nasdaq 100 UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Nasdaq 100 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 Amundi Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Nasdaq 100 has no effect on the direction of Dow Jones i.e., Dow Jones and Amundi Nasdaq go up and down completely randomly.
Pair Corralation between Dow Jones and Amundi Nasdaq
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.11 times less return on investment than Amundi Nasdaq. But when comparing it to its historical volatility, Dow Jones Industrial is 1.19 times less risky than Amundi Nasdaq. It trades about 0.36 of its potential returns per unit of risk. Amundi Nasdaq 100 UCITS is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,762,350 in Amundi Nasdaq 100 UCITS on September 4, 2024 and sell it today you would earn a total of 139,500 from holding Amundi Nasdaq 100 UCITS or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Amundi Nasdaq 100 UCITS
Performance |
| Timeline |
Dow Jones and Amundi Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Amundi Nasdaq 100 UCITS
Pair trading matchups for Amundi Nasdaq
Pair Trading with Dow Jones and Amundi Nasdaq
The main advantage of trading using opposite Dow Jones and Amundi Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Amundi Nasdaq 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 Amundi Nasdaq will offset losses from the drop in Amundi Nasdaq's long position.| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
| Amundi Nasdaq vs. Amundi EUR High | Amundi Nasdaq vs. Amundi Index Solutions | Amundi Nasdaq vs. Amundi MSCI Pacific | Amundi Nasdaq vs. Amundi MSCI Europe |
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.
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