Correlation Between AMERICAN and Dow Jones
Specify exactly 2 symbols:
By analyzing existing cross correlation between AMERICAN EXPRESS 42 and Dow Jones Industrial, you can compare the effects of market volatilities on AMERICAN 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 AMERICAN with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN and Dow Jones.
Diversification Opportunities for AMERICAN and Dow Jones
Excellent diversification
The 3 months correlation between AMERICAN and Dow is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN EXPRESS 42 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 AMERICAN 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 AMERICAN EXPRESS 42 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 AMERICAN i.e., AMERICAN and Dow Jones go up and down completely randomly.
Pair Corralation between AMERICAN and Dow Jones
Assuming the 90 days trading horizon AMERICAN EXPRESS 42 is expected to under-perform the Dow Jones. But the bond apears to be less risky and, when comparing its historical volatility, AMERICAN EXPRESS 42 is 1.94 times less risky than Dow Jones. The bond trades about 0.0 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,400,504 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 1,090,561 from holding Dow Jones Industrial or generate 32.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
AMERICAN EXPRESS 42 vs. Dow Jones Industrial
Performance |
| Timeline |
AMERICAN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AMERICAN EXPRESS 42
Pair trading matchups for AMERICAN
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AMERICAN and Dow Jones
The main advantage of trading using opposite AMERICAN and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN 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.| AMERICAN vs. Jacobs Solutions | AMERICAN vs. Jutal Offshore Oil | AMERICAN vs. Equinix | AMERICAN vs. Stepstone Group |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |