Correlation Between 03740LAF9 and Dow Jones
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By analyzing existing cross correlation between AON 5 12 SEP 32 and Dow Jones Industrial, you can compare the effects of market volatilities on 03740LAF9 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 03740LAF9 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of 03740LAF9 and Dow Jones.
Diversification Opportunities for 03740LAF9 and Dow Jones
Very weak diversification
The 3 months correlation between 03740LAF9 and Dow is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AON 5 12 SEP 32 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 03740LAF9 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 AON 5 12 SEP 32 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 03740LAF9 i.e., 03740LAF9 and Dow Jones go up and down completely randomly.
Pair Corralation between 03740LAF9 and Dow Jones
Assuming the 90 days trading horizon 03740LAF9 is expected to generate 10.46 times less return on investment than Dow Jones. But when comparing it to its historical volatility, AON 5 12 SEP 32 is 1.17 times less risky than Dow Jones. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,190,964 in Dow Jones Industrial on November 29, 2024 and sell it today you would earn a total of 1,132,986 from holding Dow Jones Industrial or generate 35.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.35% |
| Values | Daily Returns |
AON 5 12 SEP 32 vs. Dow Jones Industrial
Performance |
| Timeline |
03740LAF9 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AON 5 12 SEP 32
Pair trading matchups for 03740LAF9
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with 03740LAF9 and Dow Jones
The main advantage of trading using opposite 03740LAF9 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 03740LAF9 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.| 03740LAF9 vs. AEP TEX INC | 03740LAF9 vs. KORE Mining | 03740LAF9 vs. iShares Global Consumer | 03740LAF9 vs. Exxon Mobil Corp |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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