Correlation Between AmeriServ Financial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both AmeriServ Financial 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 AmeriServ Financial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmeriServ Financial and Dow Jones Industrial, you can compare the effects of market volatilities on AmeriServ Financial 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 AmeriServ Financial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeriServ Financial and Dow Jones.
Diversification Opportunities for AmeriServ Financial and Dow Jones
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AmeriServ and Dow is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AmeriServ Financial 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 AmeriServ Financial 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 AmeriServ Financial 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 AmeriServ Financial i.e., AmeriServ Financial and Dow Jones go up and down completely randomly.
Pair Corralation between AmeriServ Financial and Dow Jones
Given the investment horizon of 90 days AmeriServ Financial is expected to generate 3.35 times more return on investment than Dow Jones. However, AmeriServ Financial is 3.35 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.18 per unit of risk. If you would invest 266.00 in AmeriServ Financial on September 11, 2024 and sell it today you would earn a total of 22.00 from holding AmeriServ Financial or generate 8.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AmeriServ Financial vs. Dow Jones Industrial
Performance |
Timeline |
AmeriServ Financial and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
AmeriServ Financial
Pair trading matchups for AmeriServ Financial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AmeriServ Financial and Dow Jones
The main advantage of trading using opposite AmeriServ Financial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeriServ Financial 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.AmeriServ Financial vs. 1ST SUMMIT BANCORP | AmeriServ Financial vs. Potomac Bancshares | AmeriServ Financial vs. Apollo Bancorp | AmeriServ Financial vs. Century Financial 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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