Correlation Between ACI INFOCOM and DOW

By analyzing existing cross correlation between ACI INFOCOM LTD and DOW, you can compare the effects of market volatilities on ACI INFOCOM and DOW 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 ACI INFOCOM with a short position of DOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACI INFOCOM and DOW.

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Can any of the company-specific risk be diversified away by investing in both ACI INFOCOM and DOW 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 ACI INFOCOM and DOW into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for ACI INFOCOM and DOW

  Correlation Coefficient

Very weak diversification

The 3 months correlation between ACIIN and DOW is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ACI INFOCOM LTD and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and ACI INFOCOM 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 ACI INFOCOM LTD are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of ACI INFOCOM i.e. ACI INFOCOM and DOW go up and down completely randomly.

Pair Corralation between ACI INFOCOM and DOW

Assuming the 30 trading days horizon, ACI INFOCOM LTD is expected to generate 1.88 times more return on investment than DOW. However, ACI INFOCOM is 1.88 times more volatile than DOW. It trades about 0.57 of its potential returns per unit of risk. DOW is currently generating about 0.1 per unit of risk. If you would invest  19.00  in ACI INFOCOM LTD on June 10, 2020 and sell it today you would earn a total of  32.00  from holding ACI INFOCOM LTD or generate 168.42% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns


 Performance (%) 
 Predicted Return Density 
Check out your portfolio center. Please also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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