Correlation Between KBSTAR TDF2050 and Dow Jones
Can any of the company-specific risk be diversified away by investing in both KBSTAR TDF2050 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 KBSTAR TDF2050 and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR TDF2050 Active and Dow Jones Industrial, you can compare the effects of market volatilities on KBSTAR TDF2050 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 KBSTAR TDF2050 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR TDF2050 and Dow Jones.
Diversification Opportunities for KBSTAR TDF2050 and Dow Jones
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KBSTAR and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR TDF2050 Active 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 KBSTAR TDF2050 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 KBSTAR TDF2050 Active 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 KBSTAR TDF2050 i.e., KBSTAR TDF2050 and Dow Jones go up and down completely randomly.
Pair Corralation between KBSTAR TDF2050 and Dow Jones
Assuming the 90 days trading horizon KBSTAR TDF2050 Active is expected to generate 0.85 times more return on investment than Dow Jones. However, KBSTAR TDF2050 Active is 1.17 times less risky than Dow Jones. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 932,500 in KBSTAR TDF2050 Active on September 13, 2024 and sell it today you would earn a total of 414,500 from holding KBSTAR TDF2050 Active or generate 44.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.58% |
| Values | Daily Returns |
KBSTAR TDF2050 Active vs. Dow Jones Industrial
Performance |
| Timeline |
KBSTAR TDF2050 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
KBSTAR TDF2050 Active
Pair trading matchups for KBSTAR TDF2050
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KBSTAR TDF2050 and Dow Jones
The main advantage of trading using opposite KBSTAR TDF2050 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR TDF2050 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.| KBSTAR TDF2050 vs. Busan Industrial Co | KBSTAR TDF2050 vs. Busan Ind | KBSTAR TDF2050 vs. Shinhan WTI Futures | KBSTAR TDF2050 vs. UNISEM Co |
| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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