Correlation Between Taekwang Ind and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Taekwang Ind 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 Taekwang Ind and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taekwang Ind and Dow Jones Industrial, you can compare the effects of market volatilities on Taekwang Ind 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 Taekwang Ind with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and Dow Jones.
Diversification Opportunities for Taekwang Ind and Dow Jones
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taekwang and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind 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 Taekwang Ind 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 Taekwang Ind 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 Taekwang Ind i.e., Taekwang Ind and Dow Jones go up and down completely randomly.
Pair Corralation between Taekwang Ind and Dow Jones
Assuming the 90 days trading horizon Taekwang Ind is expected to generate 1.68 times more return on investment than Dow Jones. However, Taekwang Ind is 1.68 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 61,600,000 in Taekwang Ind on October 26, 2024 and sell it today you would earn a total of 1,600,000 from holding Taekwang Ind or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Taekwang Ind vs. Dow Jones Industrial
Performance |
| Timeline |
Taekwang Ind and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Taekwang Ind
Pair trading matchups for Taekwang Ind
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Taekwang Ind and Dow Jones
The main advantage of trading using opposite Taekwang Ind and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taekwang Ind 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.| Taekwang Ind vs. Handok Clean Tech | Taekwang Ind vs. SEOJEON ELECTRIC MACHINERY | Taekwang Ind vs. Clean Science co | Taekwang Ind vs. CG Hi Tech |
| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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