Correlation Between ISS AS and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ISS AS 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 ISS AS and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISS AS and Dow Jones Industrial, you can compare the effects of market volatilities on ISS AS 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 ISS AS with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISS AS and Dow Jones.
Diversification Opportunities for ISS AS and Dow Jones
Very good diversification
The 3 months correlation between ISS and Dow is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ISS AS 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 ISS AS 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 ISS AS 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 ISS AS i.e., ISS AS and Dow Jones go up and down completely randomly.
Pair Corralation between ISS AS and Dow Jones
Assuming the 90 days trading horizon ISS AS is expected to generate 1.43 times less return on investment than Dow Jones. In addition to that, ISS AS is 1.72 times more volatile than Dow Jones Industrial. It trades about 0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.06 per unit of volatility. If you would invest 4,035,809 in Dow Jones Industrial on September 21, 2024 and sell it today you would earn a total of 198,415 from holding Dow Jones Industrial or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.25% |
| Values | Daily Returns |
ISS AS vs. Dow Jones Industrial
Performance |
| Timeline |
ISS AS and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ISS AS
Pair trading matchups for ISS AS
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ISS AS and Dow Jones
The main advantage of trading using opposite ISS AS and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISS AS 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.| ISS AS vs. COMBA TELECOM SYST | ISS AS vs. BRAGG GAMING GRP | ISS AS vs. China Communications Services | ISS AS vs. QIIWI GAMES AB |
| Dow Jones vs. Kinsale Capital Group | Dow Jones vs. QBE Insurance Group | Dow Jones vs. ICC Holdings | Dow Jones vs. Weyco Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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