Correlation Between Acticor Biotech and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Acticor Biotech 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 Acticor Biotech and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acticor Biotech SAS and Dow Jones Industrial, you can compare the effects of market volatilities on Acticor Biotech 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 Acticor Biotech with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acticor Biotech and Dow Jones.
Diversification Opportunities for Acticor Biotech and Dow Jones
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acticor and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Acticor Biotech SAS 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 Acticor Biotech 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 Acticor Biotech SAS 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 Acticor Biotech i.e., Acticor Biotech and Dow Jones go up and down completely randomly.
Pair Corralation between Acticor Biotech and Dow Jones
Assuming the 90 days trading horizon Acticor Biotech SAS is expected to generate 20.92 times more return on investment than Dow Jones. However, Acticor Biotech is 20.92 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of risk. If you would invest 42.00 in Acticor Biotech SAS on September 3, 2024 and sell it today you would lose (13.00) from holding Acticor Biotech SAS or give up 30.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Acticor Biotech SAS vs. Dow Jones Industrial
Performance |
Timeline |
Acticor Biotech and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Acticor Biotech SAS
Pair trading matchups for Acticor Biotech
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Acticor Biotech and Dow Jones
The main advantage of trading using opposite Acticor Biotech and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acticor Biotech 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.Acticor Biotech vs. Acheter Louer | Acticor Biotech vs. Spineguard | Acticor Biotech vs. Vallourec | Acticor Biotech vs. Manitou BF SA |
Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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