Correlation Between HiTi Digital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both HiTi Digital 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 HiTi Digital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HiTi Digital and Dow Jones Industrial, you can compare the effects of market volatilities on HiTi Digital 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 HiTi Digital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of HiTi Digital and Dow Jones.
Diversification Opportunities for HiTi Digital and Dow Jones
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HiTi and Dow is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding HiTi Digital 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 HiTi Digital 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 HiTi Digital 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 HiTi Digital i.e., HiTi Digital and Dow Jones go up and down completely randomly.
Pair Corralation between HiTi Digital and Dow Jones
Assuming the 90 days trading horizon HiTi Digital is expected to under-perform the Dow Jones. In addition to that, HiTi Digital is 1.39 times more volatile than Dow Jones Industrial. It trades about -0.43 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 4,402,581 in Dow Jones Industrial on November 19, 2024 and sell it today you would earn a total of 52,027 from holding Dow Jones Industrial or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.0% |
| Values | Daily Returns |
HiTi Digital vs. Dow Jones Industrial
Performance |
| Timeline |
HiTi Digital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HiTi Digital
Pair trading matchups for HiTi Digital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with HiTi Digital and Dow Jones
The main advantage of trading using opposite HiTi Digital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HiTi Digital 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.| HiTi Digital vs. ASRock Inc | HiTi Digital vs. FIC Global | HiTi Digital vs. In Win Development | HiTi Digital vs. Getac Technology Corp |
| Dow Jones vs. National CineMedia | Dow Jones vs. Emerson Radio | Dow Jones vs. Space Communication | Dow Jones vs. JD Sports Fashion |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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