Correlation Between AETNA and Dow Jones
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By analyzing existing cross correlation between AETNA INC 7625 and Dow Jones Industrial, you can compare the effects of market volatilities on AETNA 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 AETNA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AETNA and Dow Jones.
Diversification Opportunities for AETNA and Dow Jones
Very good diversification
The 3 months correlation between AETNA and Dow is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AETNA INC 7625 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 AETNA 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 AETNA INC 7625 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 AETNA i.e., AETNA and Dow Jones go up and down completely randomly.
Pair Corralation between AETNA and Dow Jones
Assuming the 90 days trading horizon AETNA INC 7625 is expected to under-perform the Dow Jones. In addition to that, AETNA is 1.74 times more volatile than Dow Jones Industrial. It trades about -0.02 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 4,160,618 in Dow Jones Industrial on September 17, 2024 and sell it today you would earn a total of 222,188 from holding Dow Jones Industrial or generate 5.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 70.31% |
Values | Daily Returns |
AETNA INC 7625 vs. Dow Jones Industrial
Performance |
Timeline |
AETNA and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
AETNA INC 7625
Pair trading matchups for AETNA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AETNA and Dow Jones
The main advantage of trading using opposite AETNA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AETNA 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.AETNA vs. China Tontine Wines | AETNA vs. Insteel Industries | AETNA vs. Lion One Metals | AETNA vs. SNDL Inc |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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