Correlation Between Rexon Industrial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Rexon Industrial 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 Rexon Industrial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rexon Industrial Corp and Dow Jones Industrial, you can compare the effects of market volatilities on Rexon Industrial 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 Rexon Industrial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rexon Industrial and Dow Jones.
Diversification Opportunities for Rexon Industrial and Dow Jones
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rexon and Dow is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rexon Industrial Corp 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 Rexon Industrial 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 Rexon Industrial Corp 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 Rexon Industrial i.e., Rexon Industrial and Dow Jones go up and down completely randomly.
Pair Corralation between Rexon Industrial and Dow Jones
Assuming the 90 days trading horizon Rexon Industrial Corp is expected to under-perform the Dow Jones. In addition to that, Rexon Industrial is 1.89 times more volatile than Dow Jones Industrial. It trades about -0.11 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of volatility. If you would invest 4,290,695 in Dow Jones Industrial on October 24, 2024 and sell it today you would earn a total of 111,886 from holding Dow Jones Industrial or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Rexon Industrial Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Rexon Industrial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Rexon Industrial Corp
Pair trading matchups for Rexon Industrial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Rexon Industrial and Dow Jones
The main advantage of trading using opposite Rexon Industrial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rexon Industrial 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.| Rexon Industrial vs. Chung Hsin Electric Machinery | Rexon Industrial vs. Johnson Health Tech | Rexon Industrial vs. Shihlin Electric Engineering | Rexon Industrial vs. TECO Electric Machinery |
| Dow Jones vs. Transocean | Dow Jones vs. Noble plc | Dow Jones vs. Evolution Gaming Group | Dow Jones vs. Addus HomeCare |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |