Correlation Between Dow Jones and Axogen
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Axogen 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 Axogen 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 Axogen Inc, you can compare the effects of market volatilities on Dow Jones and Axogen 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 Axogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Axogen.
Diversification Opportunities for Dow Jones and Axogen
Good diversification
The 3 months correlation between Dow and Axogen is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen 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 Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Dow Jones i.e., Dow Jones and Axogen go up and down completely randomly.
Pair Corralation between Dow Jones and Axogen
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.49 times less return on investment than Axogen. But when comparing it to its historical volatility, Dow Jones Industrial is 6.69 times less risky than Axogen. It trades about 0.12 of its potential returns per unit of risk. Axogen Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 958.00 in Axogen Inc on August 31, 2024 and sell it today you would earn a total of 432.00 from holding Axogen Inc or generate 45.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Axogen Inc
Performance |
| Timeline |
Dow Jones and Axogen Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Axogen Inc
Pair trading matchups for Axogen
Pair Trading with Dow Jones and Axogen
The main advantage of trading using opposite Dow Jones and Axogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Axogen 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 Axogen will offset losses from the drop in Axogen's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |