Correlation Between Octopus Aim and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Octopus Aim 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 Octopus Aim and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Octopus Aim Vct and Dow Jones Industrial, you can compare the effects of market volatilities on Octopus Aim 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 Octopus Aim with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Octopus Aim and Dow Jones.
Diversification Opportunities for Octopus Aim and Dow Jones
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Octopus and Dow is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Octopus Aim Vct 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 Octopus Aim 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 Octopus Aim Vct 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 Octopus Aim i.e., Octopus Aim and Dow Jones go up and down completely randomly.
Pair Corralation between Octopus Aim and Dow Jones
Assuming the 90 days trading horizon Octopus Aim Vct is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Octopus Aim Vct is 1.13 times less risky than Dow Jones. The stock trades about -0.05 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,351,765 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,139,300 from holding Dow Jones Industrial or generate 33.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Octopus Aim Vct vs. Dow Jones Industrial
Performance |
| Timeline |
Octopus Aim and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Octopus Aim Vct
Pair trading matchups for Octopus Aim
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Octopus Aim and Dow Jones
The main advantage of trading using opposite Octopus Aim and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Octopus Aim 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.| Octopus Aim vs. Team Internet Group | Octopus Aim vs. Sparebank 1 SR | Octopus Aim vs. MT Bank Corp | Octopus Aim vs. Cembra Money Bank |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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