Correlation Between Dow Jones and AGC
Can any of the company-specific risk be diversified away by investing in both Dow Jones and AGC 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 AGC 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 AGC Inc, you can compare the effects of market volatilities on Dow Jones and AGC 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 AGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AGC.
Diversification Opportunities for Dow Jones and AGC
Good diversification
The 3 months correlation between Dow and AGC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AGC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGC Inc 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 AGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGC Inc has no effect on the direction of Dow Jones i.e., Dow Jones and AGC go up and down completely randomly.
Pair Corralation between Dow Jones and AGC
If you would invest 3,730,602 in Dow Jones Industrial on September 12, 2024 and sell it today you would earn a total of 694,181 from holding Dow Jones Industrial or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Dow Jones Industrial vs. AGC Inc
Performance |
| Timeline |
Dow Jones and AGC Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AGC Inc
Pair trading matchups for AGC
Pair Trading with Dow Jones and AGC
The main advantage of trading using opposite Dow Jones and AGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, AGC 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 AGC will offset losses from the drop in AGC's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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