Correlation Between Aberdeen and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aberdeen 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 Aberdeen and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Equity Instl and Dow Jones Industrial, you can compare the effects of market volatilities on Aberdeen 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 Aberdeen with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen and Dow Jones.
Diversification Opportunities for Aberdeen and Dow Jones
Almost no diversification
The 3 months correlation between Aberdeen and Dow is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Equity Instl 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 Aberdeen 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 Aberdeen Equity Instl 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 Aberdeen i.e., Aberdeen and Dow Jones go up and down completely randomly.
Pair Corralation between Aberdeen and Dow Jones
Assuming the 90 days horizon Aberdeen is expected to generate 1.22 times less return on investment than Dow Jones. In addition to that, Aberdeen is 1.13 times more volatile than Dow Jones Industrial. It trades about 0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 3,361,869 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,110,337 from holding Dow Jones Industrial or generate 33.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Equity Instl vs. Dow Jones Industrial
Performance |
| Timeline |
Aberdeen and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aberdeen Equity Instl
Pair trading matchups for Aberdeen
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aberdeen and Dow Jones
The main advantage of trading using opposite Aberdeen and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen 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.| Aberdeen vs. Jp Morgan Smartretirement | Aberdeen vs. Barings Active Short | Aberdeen vs. Nasdaq 100 Index Fund | Aberdeen vs. Small Cap Stock |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |