Correlation Between Dow Jones and A10 Network
Can any of the company-specific risk be diversified away by investing in both Dow Jones and A10 Network 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 A10 Network 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 A10 Network, you can compare the effects of market volatilities on Dow Jones and A10 Network 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 A10 Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and A10 Network.
Diversification Opportunities for Dow Jones and A10 Network
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dow and A10 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and A10 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Network 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 A10 Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Network has no effect on the direction of Dow Jones i.e., Dow Jones and A10 Network go up and down completely randomly.
Pair Corralation between Dow Jones and A10 Network
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.65 times less return on investment than A10 Network. But when comparing it to its historical volatility, Dow Jones Industrial is 2.94 times less risky than A10 Network. It trades about 0.12 of its potential returns per unit of risk. A10 Network is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,228 in A10 Network on August 26, 2024 and sell it today you would earn a total of 434.00 from holding A10 Network or generate 35.34% 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. A10 Network
Performance |
| Timeline |
Dow Jones and A10 Network Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
A10 Network
Pair trading matchups for A10 Network
Pair Trading with Dow Jones and A10 Network
The main advantage of trading using opposite Dow Jones and A10 Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, A10 Network 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 A10 Network will offset losses from the drop in A10 Network's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| A10 Network vs. Evertec | A10 Network vs. NetScout Systems | A10 Network vs. AvidXchange Holdings | A10 Network vs. CSG Systems International |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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