Correlation Between First Trustaberdeen and Dow Jones
Can any of the company-specific risk be diversified away by investing in both First Trustaberdeen and Dow Jones 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 First Trustaberdeen and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trustaberdeen Emerging and Dow Jones Industrial, you can compare the effects of market volatilities on First Trustaberdeen and Dow Jones 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 First Trustaberdeen with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trustaberdeen and Dow Jones.
Diversification Opportunities for First Trustaberdeen and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trustaberdeen Emerging and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and First Trustaberdeen 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 First Trustaberdeen Emerging are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of First Trustaberdeen i.e., First Trustaberdeen and Dow Jones go up and down completely randomly.
Pair Corralation between First Trustaberdeen and Dow Jones
If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 190,894 from holding Dow Jones Industrial or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
First Trustaberdeen Emerging vs. Dow Jones Industrial
Performance |
| Timeline |
First Trustaberdeen and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
First Trustaberdeen Emerging
Pair trading matchups for First Trustaberdeen
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with First Trustaberdeen and Dow Jones
The main advantage of trading using opposite First Trustaberdeen and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trustaberdeen position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| First Trustaberdeen vs. Dunham Porategovernment Bond | First Trustaberdeen vs. Lord Abbett Government | First Trustaberdeen vs. Virtus Seix Government | First Trustaberdeen vs. Us Government Securities |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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