Correlation Between Dow Jones and AGFiQ Market
Can any of the company-specific risk be diversified away by investing in both Dow Jones and AGFiQ Market 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 AGFiQ Market 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 AGFiQ Market Neutral, you can compare the effects of market volatilities on Dow Jones and AGFiQ Market 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 AGFiQ Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AGFiQ Market.
Diversification Opportunities for Dow Jones and AGFiQ Market
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and AGFiQ is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AGFiQ Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFiQ Market Neutral 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 AGFiQ Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFiQ Market Neutral has no effect on the direction of Dow Jones i.e., Dow Jones and AGFiQ Market go up and down completely randomly.
Pair Corralation between Dow Jones and AGFiQ Market
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.16 times more return on investment than AGFiQ Market. However, Dow Jones is 1.16 times more volatile than AGFiQ Market Neutral. It trades about 0.26 of its potential returns per unit of risk. AGFiQ Market Neutral is currently generating about -0.22 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. AGFiQ Market Neutral
Performance |
| Timeline |
Dow Jones and AGFiQ Market Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AGFiQ Market Neutral
Pair trading matchups for AGFiQ Market
Pair Trading with Dow Jones and AGFiQ Market
The main advantage of trading using opposite Dow Jones and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, AGFiQ Market 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 AGFiQ Market will offset losses from the drop in AGFiQ Market's long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| AGFiQ Market vs. Cambria Tail Risk | AGFiQ Market vs. IQ Merger Arbitrage | AGFiQ Market vs. Amplify BlackSwan Growth | AGFiQ Market vs. AdvisorShares Dorsey Wright |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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