Correlation Between A1TM34 and Dow Jones
Can any of the company-specific risk be diversified away by investing in both A1TM34 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 A1TM34 and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A1TM34 and Dow Jones Industrial, you can compare the effects of market volatilities on A1TM34 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 A1TM34 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1TM34 and Dow Jones.
Diversification Opportunities for A1TM34 and Dow Jones
Poor diversification
The 3 months correlation between A1TM34 and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding A1TM34 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 A1TM34 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 A1TM34 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 A1TM34 i.e., A1TM34 and Dow Jones go up and down completely randomly.
Pair Corralation between A1TM34 and Dow Jones
Assuming the 90 days trading horizon A1TM34 is expected to generate 0.71 times more return on investment than Dow Jones. However, A1TM34 is 1.41 times less risky than Dow Jones. It trades about 0.34 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.3 per unit of risk. If you would invest 41,106 in A1TM34 on September 24, 2024 and sell it today you would earn a total of 1,482 from holding A1TM34 or generate 3.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
A1TM34 vs. Dow Jones Industrial
Performance |
Timeline |
A1TM34 and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
A1TM34
Pair trading matchups for A1TM34
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with A1TM34 and Dow Jones
The main advantage of trading using opposite A1TM34 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1TM34 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.A1TM34 vs. Taiwan Semiconductor Manufacturing | A1TM34 vs. Apple Inc | A1TM34 vs. Alibaba Group Holding | A1TM34 vs. Microsoft |
Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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