Correlation Between MITECH CoLtd and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MITECH CoLtd 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 MITECH CoLtd and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MITECH CoLtd and Dow Jones Industrial, you can compare the effects of market volatilities on MITECH CoLtd 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 MITECH CoLtd with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MITECH CoLtd and Dow Jones.
Diversification Opportunities for MITECH CoLtd and Dow Jones
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between MITECH and Dow is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MITECH 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 MITECH CoLtd 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 MITECH 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 MITECH CoLtd i.e., MITECH CoLtd and Dow Jones go up and down completely randomly.
Pair Corralation between MITECH CoLtd and Dow Jones
Assuming the 90 days trading horizon MITECH CoLtd is expected to generate 3.19 times more return on investment than Dow Jones. However, MITECH CoLtd is 3.19 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.3 per unit of risk. If you would invest 759,000 in MITECH CoLtd on September 24, 2024 and sell it today you would earn a total of 56,000 from holding MITECH CoLtd or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
MITECH CoLtd vs. Dow Jones Industrial
Performance |
| Timeline |
MITECH CoLtd and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MITECH CoLtd
Pair trading matchups for MITECH CoLtd
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MITECH CoLtd and Dow Jones
The main advantage of trading using opposite MITECH CoLtd and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MITECH CoLtd 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.| MITECH CoLtd vs. Samsung Electronics Co | MITECH CoLtd vs. Samsung Electronics Co | MITECH CoLtd vs. LG Energy Solution | MITECH CoLtd vs. SK Hynix |
| Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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