Correlation Between SFA Semicon and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SFA Semicon 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 SFA Semicon and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFA Semicon Co and Dow Jones Industrial, you can compare the effects of market volatilities on SFA Semicon 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 SFA Semicon with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFA Semicon and Dow Jones.
Diversification Opportunities for SFA Semicon and Dow Jones
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SFA and Dow is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SFA Semicon 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 SFA Semicon 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 SFA Semicon 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 SFA Semicon i.e., SFA Semicon and Dow Jones go up and down completely randomly.
Pair Corralation between SFA Semicon and Dow Jones
Assuming the 90 days trading horizon SFA Semicon Co is expected to under-perform the Dow Jones. In addition to that, SFA Semicon is 2.39 times more volatile than Dow Jones Industrial. It trades about -0.17 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of volatility. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFA Semicon Co vs. Dow Jones Industrial
Performance |
| Timeline |
SFA Semicon and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SFA Semicon Co
Pair trading matchups for SFA Semicon
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SFA Semicon and Dow Jones
The main advantage of trading using opposite SFA Semicon and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFA Semicon 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.| SFA Semicon vs. Korea Real Estate | SFA Semicon vs. Korea Ratings Co | SFA Semicon vs. IQuest Co | SFA Semicon vs. Wonbang Tech Co |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |