Correlation Between Dow Jones and Accelerate Canadian
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Accelerate Canadian 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 Accelerate Canadian 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 Accelerate Canadian Long, you can compare the effects of market volatilities on Dow Jones and Accelerate Canadian 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 Accelerate Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Accelerate Canadian.
Diversification Opportunities for Dow Jones and Accelerate Canadian
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Accelerate is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Accelerate Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Canadian Long 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 Accelerate Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Canadian Long has no effect on the direction of Dow Jones i.e., Dow Jones and Accelerate Canadian go up and down completely randomly.
Pair Corralation between Dow Jones and Accelerate Canadian
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.87 times more return on investment than Accelerate Canadian. However, Dow Jones Industrial is 1.15 times less risky than Accelerate Canadian. It trades about 0.1 of its potential returns per unit of risk. Accelerate Canadian Long is currently generating about 0.08 per unit of risk. If you would invest 3,897,241 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 532,410 from holding Dow Jones Industrial or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.95% |
| Values | Daily Returns |
Dow Jones Industrial vs. Accelerate Canadian Long
Performance |
| Timeline |
Dow Jones and Accelerate Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Accelerate Canadian Long
Pair trading matchups for Accelerate Canadian
Pair Trading with Dow Jones and Accelerate Canadian
The main advantage of trading using opposite Dow Jones and Accelerate Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Accelerate Canadian 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 Accelerate Canadian will offset losses from the drop in Accelerate Canadian'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 |
| Accelerate Canadian vs. Trican Well Service | Accelerate Canadian vs. Ensign Energy Services | Accelerate Canadian vs. Calfrac Well Services | Accelerate Canadian vs. Birchcliff Energy |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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