Correlation Between Dow Jones and AXS TSLA
Can any of the company-specific risk be diversified away by investing in both Dow Jones and AXS TSLA 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 AXS TSLA 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 AXS TSLA Bear, you can compare the effects of market volatilities on Dow Jones and AXS TSLA 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 AXS TSLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AXS TSLA.
Diversification Opportunities for Dow Jones and AXS TSLA
Very weak diversification
The 3 months correlation between Dow and AXS is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AXS TSLA Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXS TSLA Bear 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 AXS TSLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXS TSLA Bear has no effect on the direction of Dow Jones i.e., Dow Jones and AXS TSLA go up and down completely randomly.
Pair Corralation between Dow Jones and AXS TSLA
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.09 times more return on investment than AXS TSLA. However, Dow Jones Industrial is 10.62 times less risky than AXS TSLA. It trades about 0.09 of its potential returns per unit of risk. AXS TSLA Bear is currently generating about -0.06 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on November 28, 2024 and sell it today you would earn a total of 505,013 from holding Dow Jones Industrial or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
Dow Jones Industrial vs. AXS TSLA Bear
Performance |
| Timeline |
Dow Jones and AXS TSLA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AXS TSLA Bear
Pair trading matchups for AXS TSLA
Pair Trading with Dow Jones and AXS TSLA
The main advantage of trading using opposite Dow Jones and AXS TSLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, AXS TSLA 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 AXS TSLA will offset losses from the drop in AXS TSLA's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| AXS TSLA vs. AXS 125X NVDA | AXS TSLA vs. Direxion Shares ETF | AXS TSLA vs. Direxion Shares ETF | AXS TSLA vs. Tuttle Capital Short |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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