Correlation Between Dow Jones and Amundi Climate
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Amundi Climate 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 Amundi Climate 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 Amundi Climate Transition, you can compare the effects of market volatilities on Dow Jones and Amundi Climate 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 Amundi Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Amundi Climate.
Diversification Opportunities for Dow Jones and Amundi Climate
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Amundi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Amundi Climate Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Climate Transition 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 Amundi Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Climate Transition has no effect on the direction of Dow Jones i.e., Dow Jones and Amundi Climate go up and down completely randomly.
Pair Corralation between Dow Jones and Amundi Climate
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.59 times more return on investment than Amundi Climate. However, Dow Jones is 1.59 times more volatile than Amundi Climate Transition. It trades about 0.15 of its potential returns per unit of risk. Amundi Climate Transition is currently generating about 0.09 per unit of risk. If you would invest 3,312,955 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 1,159,251 from holding Dow Jones Industrial or generate 34.99% 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. Amundi Climate Transition
Performance |
| Timeline |
Dow Jones and Amundi Climate Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Amundi Climate Transition
Pair trading matchups for Amundi Climate
Pair Trading with Dow Jones and Amundi Climate
The main advantage of trading using opposite Dow Jones and Amundi Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Amundi Climate 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 Amundi Climate will offset losses from the drop in Amundi Climate's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Amundi Climate vs. Virtus Seix Government | Amundi Climate vs. Inverse Government Long | Amundi Climate vs. Aig Government Money | Amundi Climate vs. Government Securities Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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