Correlation Between ENERGYMACHINERY KOREA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENERGYMACHINERY KOREA CoLtd and Dow Jones Industrial, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and Dow Jones.
Diversification Opportunities for ENERGYMACHINERY KOREA and Dow Jones
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENERGYMACHINERY and Dow is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and Dow Jones go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and Dow Jones
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA is expected to generate 1.64 times less return on investment than Dow Jones. In addition to that, ENERGYMACHINERY KOREA is 4.33 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,867,736 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 586,730 from holding Dow Jones Industrial or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.56% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. Dow Jones Industrial
Performance |
| Timeline |
ENERGYMACHINERY KOREA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
ENERGYMACHINERY KOREA CoLtd
Pair trading matchups for ENERGYMACHINERY KOREA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with ENERGYMACHINERY KOREA and Dow Jones
The main advantage of trading using opposite ENERGYMACHINERY KOREA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA 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.| ENERGYMACHINERY KOREA vs. DSC Investment | ENERGYMACHINERY KOREA vs. Woori Technology | ENERGYMACHINERY KOREA vs. TS Investment Corp | ENERGYMACHINERY KOREA vs. Stic Investments |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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