Correlation Between Yuanta Daily and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Yuanta Daily 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 Yuanta Daily and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Daily CSI and Dow Jones Industrial, you can compare the effects of market volatilities on Yuanta Daily 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 Yuanta Daily with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Daily and Dow Jones.
Diversification Opportunities for Yuanta Daily and Dow Jones
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuanta and Dow is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Daily CSI 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 Yuanta Daily 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 Yuanta Daily CSI 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 Yuanta Daily i.e., Yuanta Daily and Dow Jones go up and down completely randomly.
Pair Corralation between Yuanta Daily and Dow Jones
Assuming the 90 days trading horizon Yuanta Daily CSI is expected to generate 4.73 times more return on investment than Dow Jones. However, Yuanta Daily is 4.73 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of risk. If you would invest 1,429 in Yuanta Daily CSI on August 25, 2024 and sell it today you would earn a total of 156.00 from holding Yuanta Daily CSI or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Yuanta Daily CSI vs. Dow Jones Industrial
Performance |
| Timeline |
Yuanta Daily and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Yuanta Daily CSI
Pair trading matchups for Yuanta Daily
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Yuanta Daily and Dow Jones
The main advantage of trading using opposite Yuanta Daily and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Daily 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.| Yuanta Daily vs. Yuanta Daily SP | Yuanta Daily vs. Yuanta Securities Investment | Yuanta Daily vs. Yuanta SP GSCI | Yuanta Daily vs. Yuanta Global NexGen |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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