Correlation Between SPDR Dow and Autoneum Holding
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and Autoneum Holding 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 SPDR Dow and Autoneum Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and Autoneum Holding AG, you can compare the effects of market volatilities on SPDR Dow and Autoneum Holding 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 SPDR Dow with a short position of Autoneum Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and Autoneum Holding.
Diversification Opportunities for SPDR Dow and Autoneum Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and Autoneum is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and Autoneum Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoneum Holding and SPDR Dow 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 SPDR Dow Jones are associated (or correlated) with Autoneum Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoneum Holding has no effect on the direction of SPDR Dow i.e., SPDR Dow and Autoneum Holding go up and down completely randomly.
Pair Corralation between SPDR Dow and Autoneum Holding
Assuming the 90 days trading horizon SPDR Dow is expected to generate 33.45 times less return on investment than Autoneum Holding. But when comparing it to its historical volatility, SPDR Dow Jones is 1.53 times less risky than Autoneum Holding. It trades about 0.01 of its potential returns per unit of risk. Autoneum Holding AG is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 10,740 in Autoneum Holding AG on November 7, 2024 and sell it today you would earn a total of 1,620 from holding Autoneum Holding AG or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. Autoneum Holding AG
Performance |
| Timeline |
| SPDR Dow Jones |
| Autoneum Holding |
SPDR Dow and Autoneum Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and Autoneum Holding
The main advantage of trading using opposite SPDR Dow and Autoneum Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, Autoneum Holding 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 Autoneum Holding will offset losses from the drop in Autoneum Holding's long position.| SPDR Dow vs. UBSFund Solutions MSCI | SPDR Dow vs. Vanguard SP 500 | SPDR Dow vs. iShares VII PLC | SPDR Dow vs. iShares Core SP |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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