Correlation Between Ambac Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ambac Financial 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 Ambac Financial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambac Financial Group and Dow Jones Industrial, you can compare the effects of market volatilities on Ambac Financial 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 Ambac Financial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambac Financial and Dow Jones.
Diversification Opportunities for Ambac Financial and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ambac and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ambac Financial Group 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 Ambac Financial 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 Ambac Financial Group 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 Ambac Financial i.e., Ambac Financial and Dow Jones go up and down completely randomly.
Pair Corralation between Ambac Financial and Dow Jones
If you would invest 0.00 in Ambac Financial Group on September 21, 2024 and sell it today you would earn a total of 0.00 from holding Ambac Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ambac Financial Group vs. Dow Jones Industrial
Performance |
| Timeline |
Ambac Financial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ambac Financial Group
Pair trading matchups for Ambac Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ambac Financial and Dow Jones
The main advantage of trading using opposite Ambac Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambac Financial 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.| Ambac Financial vs. WisdomTree Investments | Ambac Financial vs. SLR Investment Corp | Ambac Financial vs. EAT WELL INVESTMENT | Ambac Financial vs. New Residential Investment |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Sabre Corpo | Dow Jones vs. Glacier Bancorp | Dow Jones vs. Barings BDC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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