Correlation Between Dongwha Enterprise and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Dongwha Enterprise 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 Dongwha Enterprise and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwha Enterprise CoLtd and Dow Jones Industrial, you can compare the effects of market volatilities on Dongwha Enterprise 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 Dongwha Enterprise with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwha Enterprise and Dow Jones.
Diversification Opportunities for Dongwha Enterprise and Dow Jones
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongwha and Dow is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dongwha Enterprise CoLtd 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 Dongwha Enterprise 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 Dongwha Enterprise CoLtd 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 Dongwha Enterprise i.e., Dongwha Enterprise and Dow Jones go up and down completely randomly.
Pair Corralation between Dongwha Enterprise and Dow Jones
Assuming the 90 days trading horizon Dongwha Enterprise CoLtd is expected to under-perform the Dow Jones. In addition to that, Dongwha Enterprise is 5.86 times more volatile than Dow Jones Industrial. It trades about -0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,373,930 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 1,104,270 from holding Dow Jones Industrial or generate 32.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.76% |
| Values | Daily Returns |
Dongwha Enterprise CoLtd vs. Dow Jones Industrial
Performance |
| Timeline |
Dongwha Enterprise and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dongwha Enterprise CoLtd
Pair trading matchups for Dongwha Enterprise
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Dongwha Enterprise and Dow Jones
The main advantage of trading using opposite Dongwha Enterprise and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwha Enterprise 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.| Dongwha Enterprise vs. Ananti Inc | Dongwha Enterprise vs. InBody CoLtd | Dongwha Enterprise vs. Dongsin Engineering Construction | Dongwha Enterprise vs. LF Co |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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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