Correlation Between Dow Jones and AcouSort
Can any of the company-specific risk be diversified away by investing in both Dow Jones and AcouSort 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 Dow Jones and AcouSort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and AcouSort AB, you can compare the effects of market volatilities on Dow Jones and AcouSort 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 Dow Jones with a short position of AcouSort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and AcouSort.
Diversification Opportunities for Dow Jones and AcouSort
Pay attention - limited upside
The 3 months correlation between Dow and AcouSort is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and AcouSort AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcouSort AB and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with AcouSort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcouSort AB has no effect on the direction of Dow Jones i.e., Dow Jones and AcouSort go up and down completely randomly.
Pair Corralation between Dow Jones and AcouSort
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than AcouSort. However, Dow Jones Industrial is 4.68 times less risky than AcouSort. It trades about 0.23 of its potential returns per unit of risk. AcouSort AB is currently generating about -0.01 per unit of risk. If you would invest 4,009,340 in Dow Jones Industrial on April 24, 2025 and sell it today you would earn a total of 440,904 from holding Dow Jones Industrial or generate 11.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Dow Jones Industrial vs. AcouSort AB
Performance |
Timeline |
Dow Jones and AcouSort Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
AcouSort AB
Pair trading matchups for AcouSort
Pair Trading with Dow Jones and AcouSort
The main advantage of trading using opposite Dow Jones and AcouSort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, AcouSort 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 AcouSort will offset losses from the drop in AcouSort's long position.Dow Jones vs. Stereo Vision Entertainment | Dow Jones vs. Triton International Limited | Dow Jones vs. Loandepot | Dow Jones vs. Sonos 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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