Correlation Between Aston Bay and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aston Bay 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 Aston Bay and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Bay Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on Aston Bay 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 Aston Bay with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Bay and Dow Jones.
Diversification Opportunities for Aston Bay and Dow Jones
Pay attention - limited upside
The 3 months correlation between Aston and Dow is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aston Bay Holdings 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 Aston Bay 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 Aston Bay Holdings 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 Aston Bay i.e., Aston Bay and Dow Jones go up and down completely randomly.
Pair Corralation between Aston Bay and Dow Jones
Assuming the 90 days horizon Aston Bay Holdings is expected to under-perform the Dow Jones. In addition to that, Aston Bay is 7.79 times more volatile than Dow Jones Industrial. It trades about -0.12 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 4,162,208 in Dow Jones Industrial on September 16, 2024 and sell it today you would earn a total of 220,598 from holding Dow Jones Industrial or generate 5.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aston Bay Holdings vs. Dow Jones Industrial
Performance |
Timeline |
Aston Bay and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Aston Bay Holdings
Pair trading matchups for Aston Bay
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aston Bay and Dow Jones
The main advantage of trading using opposite Aston Bay and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Bay 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.Aston Bay vs. Laramide Resources | Aston Bay vs. Chibougamau Independent Mines | Aston Bay vs. Avrupa Minerals | Aston Bay vs. Thunderstruck Resources |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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