Correlation Between Arctic Fish and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Arctic Fish 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 Arctic Fish and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Fish Holding and Dow Jones Industrial, you can compare the effects of market volatilities on Arctic Fish 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 Arctic Fish with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Fish and Dow Jones.
Diversification Opportunities for Arctic Fish and Dow Jones
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arctic and Dow is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Fish Holding 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 Arctic Fish 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 Arctic Fish Holding 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 Arctic Fish i.e., Arctic Fish and Dow Jones go up and down completely randomly.
Pair Corralation between Arctic Fish and Dow Jones
Assuming the 90 days trading horizon Arctic Fish Holding is expected to generate 5.63 times more return on investment than Dow Jones. However, Arctic Fish is 5.63 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 4,740 in Arctic Fish Holding on September 5, 2024 and sell it today you would earn a total of 2,110 from holding Arctic Fish Holding or generate 44.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Arctic Fish Holding vs. Dow Jones Industrial
Performance |
Timeline |
Arctic Fish and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Arctic Fish Holding
Pair trading matchups for Arctic Fish
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Arctic Fish and Dow Jones
The main advantage of trading using opposite Arctic Fish and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Fish 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.Arctic Fish vs. SalMar ASA | Arctic Fish vs. Austevoll Seafood ASA | Arctic Fish vs. Icelandic Salmon As | Arctic Fish vs. Salmon Evolution Holding |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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