Correlation Between Hanwha ARIRANG and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hanwha ARIRANG 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 Hanwha ARIRANG and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha ARIRANG KTB and Dow Jones Industrial, you can compare the effects of market volatilities on Hanwha ARIRANG 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 Hanwha ARIRANG with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha ARIRANG and Dow Jones.
Diversification Opportunities for Hanwha ARIRANG and Dow Jones
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanwha and Dow is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha ARIRANG KTB 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 Hanwha ARIRANG 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 Hanwha ARIRANG KTB 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 Hanwha ARIRANG i.e., Hanwha ARIRANG and Dow Jones go up and down completely randomly.
Pair Corralation between Hanwha ARIRANG and Dow Jones
Assuming the 90 days trading horizon Hanwha ARIRANG is expected to generate 2.11 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Hanwha ARIRANG KTB is 3.36 times less risky than Dow Jones. It trades about 0.45 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanwha ARIRANG KTB vs. Dow Jones Industrial
Performance |
| Timeline |
Hanwha ARIRANG and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hanwha ARIRANG KTB
Pair trading matchups for Hanwha ARIRANG
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hanwha ARIRANG and Dow Jones
The main advantage of trading using opposite Hanwha ARIRANG and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha ARIRANG 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.| Hanwha ARIRANG vs. Busan Industrial Co | Hanwha ARIRANG vs. Busan Ind | Hanwha ARIRANG vs. Mirae Asset Daewoo | Hanwha ARIRANG vs. Shinhan WTI Futures |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |