Correlation Between Dow Jones and Avensia Publ
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Avensia Publ 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 Avensia Publ 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 Avensia publ AB, you can compare the effects of market volatilities on Dow Jones and Avensia Publ 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 Avensia Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Avensia Publ.
Diversification Opportunities for Dow Jones and Avensia Publ
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Avensia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ AB 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 Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of Dow Jones i.e., Dow Jones and Avensia Publ go up and down completely randomly.
Pair Corralation between Dow Jones and Avensia Publ
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.35 times more return on investment than Avensia Publ. However, Dow Jones Industrial is 2.87 times less risky than Avensia Publ. It trades about 0.16 of its potential returns per unit of risk. Avensia publ AB is currently generating about 0.0 per unit of risk. If you would invest 3,781,592 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 704,439 from holding Dow Jones Industrial or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Avensia publ AB
Performance |
| Timeline |
Dow Jones and Avensia Publ Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Avensia publ AB
Pair trading matchups for Avensia Publ
Pair Trading with Dow Jones and Avensia Publ
The main advantage of trading using opposite Dow Jones and Avensia Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Avensia Publ 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 Avensia Publ will offset losses from the drop in Avensia Publ's long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| Avensia Publ vs. Svedbergs i Dalstorp | Avensia Publ vs. Know IT AB | Avensia Publ vs. FormPipe Software AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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