Correlation Between Dow Jones and 0010EPAF5
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By analyzing existing cross correlation between Dow Jones Industrial and AEP TEX CENT, you can compare the effects of market volatilities on Dow Jones and 0010EPAF5 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 0010EPAF5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and 0010EPAF5.
Diversification Opportunities for Dow Jones and 0010EPAF5
Excellent diversification
The 3 months correlation between Dow and 0010EPAF5 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AEP TEX CENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX CENT 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 0010EPAF5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX CENT has no effect on the direction of Dow Jones i.e., Dow Jones and 0010EPAF5 go up and down completely randomly.
Pair Corralation between Dow Jones and 0010EPAF5
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.23 times more return on investment than 0010EPAF5. However, Dow Jones is 1.23 times more volatile than AEP TEX CENT. It trades about 0.29 of its potential returns per unit of risk. AEP TEX CENT is currently generating about -0.1 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Dow Jones Industrial vs. AEP TEX CENT
Performance |
| Timeline |
Dow Jones and 0010EPAF5 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AEP TEX CENT
Pair trading matchups for 0010EPAF5
Pair Trading with Dow Jones and 0010EPAF5
The main advantage of trading using opposite Dow Jones and 0010EPAF5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, 0010EPAF5 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 0010EPAF5 will offset losses from the drop in 0010EPAF5'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 |
| 0010EPAF5 vs. Virco Manufacturing | 0010EPAF5 vs. Microbot Medical | 0010EPAF5 vs. GameStop Corp | 0010EPAF5 vs. Contagious Gaming |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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