Correlation Between AlphaMark Actively and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AlphaMark Actively 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 AlphaMark Actively and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlphaMark Actively Managed and Dow Jones Industrial, you can compare the effects of market volatilities on AlphaMark Actively 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 AlphaMark Actively with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlphaMark Actively and Dow Jones.
Diversification Opportunities for AlphaMark Actively and Dow Jones
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AlphaMark and Dow is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding AlphaMark Actively Managed 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 AlphaMark Actively 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 AlphaMark Actively Managed 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 AlphaMark Actively i.e., AlphaMark Actively and Dow Jones go up and down completely randomly.
Pair Corralation between AlphaMark Actively and Dow Jones
Given the investment horizon of 90 days AlphaMark Actively Managed is expected to generate 1.82 times more return on investment than Dow Jones. However, AlphaMark Actively is 1.82 times more volatile than Dow Jones Industrial. It trades about 0.24 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of risk. If you would invest 3,244 in AlphaMark Actively Managed on September 1, 2024 and sell it today you would earn a total of 296.00 from holding AlphaMark Actively Managed or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
AlphaMark Actively Managed vs. Dow Jones Industrial
Performance |
| Timeline |
AlphaMark Actively and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AlphaMark Actively Managed
Pair trading matchups for AlphaMark Actively
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AlphaMark Actively and Dow Jones
The main advantage of trading using opposite AlphaMark Actively and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlphaMark Actively 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.| AlphaMark Actively vs. First Trust RiverFront | AlphaMark Actively vs. First Trust RiverFront | AlphaMark Actively vs. Arrow DWA Tactical | AlphaMark Actively vs. First Trust Developed |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance |