Correlation Between Shin Kong and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Shin Kong 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 Shin Kong and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Kong Financial and Dow Jones Industrial, you can compare the effects of market volatilities on Shin Kong 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 Shin Kong with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Dow Jones.
Diversification Opportunities for Shin Kong and Dow Jones
Pay attention - limited upside
The 3 months correlation between Shin and Dow is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial 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 Shin Kong 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 Shin Kong Financial 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 Shin Kong i.e., Shin Kong and Dow Jones go up and down completely randomly.
Pair Corralation between Shin Kong and Dow Jones
Assuming the 90 days trading horizon Shin Kong is expected to generate 1.46 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Shin Kong Financial is 1.52 times less risky than Dow Jones. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. Dow Jones Industrial
Performance |
| Timeline |
Shin Kong and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shin Kong Financial
Pair trading matchups for Shin Kong
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shin Kong and Dow Jones
The main advantage of trading using opposite Shin Kong and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong 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.| Shin Kong vs. Fubon Financial Holding | Shin Kong vs. Cathay Financial Holding | Shin Kong vs. ESUN Financial Holding |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |