Correlation Between Dow Jones and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Amg Gwk 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 Amg Gwk 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 Amg Gwk Municipal, you can compare the effects of market volatilities on Dow Jones and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Amg Gwk.
Diversification Opportunities for Dow Jones and Amg Gwk
Good diversification
The 3 months correlation between Dow and Amg is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Amg Gwk Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Municipal 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 Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Municipal has no effect on the direction of Dow Jones i.e., Dow Jones and Amg Gwk go up and down completely randomly.
Pair Corralation between Dow Jones and Amg Gwk
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.39 times more return on investment than Amg Gwk. However, Dow Jones is 2.39 times more volatile than Amg Gwk Municipal. It trades about 0.2 of its potential returns per unit of risk. Amg Gwk Municipal is currently generating about 0.06 per unit of risk. If you would invest 4,093,693 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 397,372 from holding Dow Jones Industrial or generate 9.71% 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. Amg Gwk Municipal
Performance |
| Timeline |
Dow Jones and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Amg Gwk Municipal
Pair trading matchups for Amg Gwk
Pair Trading with Dow Jones and Amg Gwk
The main advantage of trading using opposite Dow Jones and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Amg Gwk vs. Amg Gwk Municipal | Amg Gwk vs. Amg Managers Doubleline | Amg Gwk vs. Oppenheimer Rochester Amt Free | Amg Gwk vs. Columbia Emerging Markets |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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