Correlation Between Dow Jones and Aquaporin
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Aquaporin 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 Aquaporin 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 Aquaporin AS, you can compare the effects of market volatilities on Dow Jones and Aquaporin 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 Aquaporin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Aquaporin.
Diversification Opportunities for Dow Jones and Aquaporin
Significant diversification
The 3 months correlation between Dow and Aquaporin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Aquaporin AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquaporin AS 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 Aquaporin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquaporin AS has no effect on the direction of Dow Jones i.e., Dow Jones and Aquaporin go up and down completely randomly.
Pair Corralation between Dow Jones and Aquaporin
Assuming the 90 days trading horizon Dow Jones is expected to generate 5.74 times less return on investment than Aquaporin. But when comparing it to its historical volatility, Dow Jones Industrial is 8.33 times less risky than Aquaporin. It trades about 0.19 of its potential returns per unit of risk. Aquaporin AS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,585 in Aquaporin AS on October 26, 2024 and sell it today you would earn a total of 210.00 from holding Aquaporin AS or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dow Jones Industrial vs. Aquaporin AS
Performance |
| Timeline |
Dow Jones and Aquaporin Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Aquaporin AS
Pair trading matchups for Aquaporin
Pair Trading with Dow Jones and Aquaporin
The main advantage of trading using opposite Dow Jones and Aquaporin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Aquaporin 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 Aquaporin will offset losses from the drop in Aquaporin's long position.| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
| Aquaporin vs. Green Hydrogen Systems | Aquaporin vs. FOM Technologies AS | Aquaporin vs. ALK Abell AS | Aquaporin vs. Trifork Holding AG |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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