Correlation Between Ab Flexfee and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ab Flexfee 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 Ab Flexfee and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Flexfee Thematic and Dow Jones Industrial, you can compare the effects of market volatilities on Ab Flexfee 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 Ab Flexfee with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Flexfee and Dow Jones.
Diversification Opportunities for Ab Flexfee and Dow Jones
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FFTYX and Dow is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ab Flexfee Thematic 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 Ab Flexfee 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 Ab Flexfee Thematic 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 Ab Flexfee i.e., Ab Flexfee and Dow Jones go up and down completely randomly.
Pair Corralation between Ab Flexfee and Dow Jones
Assuming the 90 days horizon Ab Flexfee is expected to generate 58.94 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Ab Flexfee Thematic is 1.15 times less risky than Dow Jones. It trades about 0.0 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Flexfee Thematic vs. Dow Jones Industrial
Performance |
| Timeline |
Ab Flexfee and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ab Flexfee Thematic
Pair trading matchups for Ab Flexfee
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ab Flexfee and Dow Jones
The main advantage of trading using opposite Ab Flexfee and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Flexfee 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.| Ab Flexfee vs. Morgan Stanley Government | Ab Flexfee vs. Ubs Money Series | Ab Flexfee vs. Ashmore Emerging Markets | Ab Flexfee vs. Plan Investment |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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