Correlation Between Ab Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Global 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 Global E and Dow Jones Industrial, you can compare the effects of market volatilities on Ab Global 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 Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Dow Jones.
Diversification Opportunities for Ab Global and Dow Jones
Very weak diversification
The 3 months correlation between GCEYX and Dow is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global E 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 Global 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 Global E 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 Global i.e., Ab Global and Dow Jones go up and down completely randomly.
Pair Corralation between Ab Global and Dow Jones
Assuming the 90 days horizon Ab Global is expected to generate 1.16 times less return on investment than Dow Jones. In addition to that, Ab Global is 1.05 times more volatile than Dow Jones Industrial. It trades about 0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,389,102 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,040,549 from holding Dow Jones Industrial or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global E vs. Dow Jones Industrial
Performance |
| Timeline |
Ab Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ab Global E
Pair trading matchups for Ab Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ab Global and Dow Jones
The main advantage of trading using opposite Ab Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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 Global vs. Artisan High Income | Ab Global vs. Multi Manager High Yield | Ab Global vs. Msift High Yield | Ab Global vs. Gmo High Yield |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |