Correlation Between Dow Jones and Allianzgi Emerging
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Allianzgi Emerging 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 Allianzgi Emerging 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 Allianzgi Emerging Markets, you can compare the effects of market volatilities on Dow Jones and Allianzgi Emerging 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 Allianzgi Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Allianzgi Emerging.
Diversification Opportunities for Dow Jones and Allianzgi Emerging
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Allianzgi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Allianzgi Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Emerging 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 Allianzgi Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Emerging has no effect on the direction of Dow Jones i.e., Dow Jones and Allianzgi Emerging go up and down completely randomly.
Pair Corralation between Dow Jones and Allianzgi Emerging
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.91 times more return on investment than Allianzgi Emerging. However, Dow Jones Industrial is 1.1 times less risky than Allianzgi Emerging. It trades about 0.08 of its potential returns per unit of risk. Allianzgi Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 3,394,710 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% 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. Allianzgi Emerging Markets
Performance |
| Timeline |
Dow Jones and Allianzgi Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Allianzgi Emerging Markets
Pair trading matchups for Allianzgi Emerging
Pair Trading with Dow Jones and Allianzgi Emerging
The main advantage of trading using opposite Dow Jones and Allianzgi Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Allianzgi Emerging 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 Allianzgi Emerging will offset losses from the drop in Allianzgi Emerging's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Allianzgi Emerging vs. Ultraemerging Markets Profund | Allianzgi Emerging vs. Allianzgi Nfj International | Allianzgi Emerging vs. Alger Global Growth | Allianzgi Emerging vs. Allianzgi Emerging Markets |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |