Correlation Between Hwasung Industrial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hwasung Industrial 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 Hwasung Industrial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwasung Industrial Co and Dow Jones Industrial, you can compare the effects of market volatilities on Hwasung Industrial 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 Hwasung Industrial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwasung Industrial and Dow Jones.
Diversification Opportunities for Hwasung Industrial and Dow Jones
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hwasung and Dow is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hwasung Industrial Co 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 Hwasung Industrial 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 Hwasung Industrial Co 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 Hwasung Industrial i.e., Hwasung Industrial and Dow Jones go up and down completely randomly.
Pair Corralation between Hwasung Industrial and Dow Jones
Assuming the 90 days trading horizon Hwasung Industrial Co is expected to generate 1.73 times more return on investment than Dow Jones. However, Hwasung Industrial is 1.73 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.25 per unit of risk. If you would invest 918,698 in Hwasung Industrial Co on October 15, 2024 and sell it today you would earn a total of 33,302 from holding Hwasung Industrial Co or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Hwasung Industrial Co vs. Dow Jones Industrial
Performance |
| Timeline |
Hwasung Industrial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hwasung Industrial Co
Pair trading matchups for Hwasung Industrial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hwasung Industrial and Dow Jones
The main advantage of trading using opposite Hwasung Industrial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwasung Industrial 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.| Hwasung Industrial vs. Songwon Industrial Co | Hwasung Industrial vs. ABOV Semiconductor Co | Hwasung Industrial vs. Handok Clean Tech | Hwasung Industrial vs. Cheryong Industrial CoLtd |
| Dow Jones vs. Chipotle Mexican Grill | Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Dine Brands Global | Dow Jones vs. Alvotech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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