Correlation Between Koge Micro and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Koge Micro 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 Koge Micro and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koge Micro Tech and Dow Jones Industrial, you can compare the effects of market volatilities on Koge Micro 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 Koge Micro with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koge Micro and Dow Jones.
Diversification Opportunities for Koge Micro and Dow Jones
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Koge and Dow is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Koge Micro Tech 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 Koge Micro 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 Koge Micro Tech 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 Koge Micro i.e., Koge Micro and Dow Jones go up and down completely randomly.
Pair Corralation between Koge Micro and Dow Jones
Assuming the 90 days trading horizon Koge Micro Tech is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Koge Micro Tech is 1.01 times less risky than Dow Jones. The stock trades about -0.21 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Koge Micro Tech vs. Dow Jones Industrial
Performance |
| Timeline |
Koge Micro and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Koge Micro Tech
Pair trading matchups for Koge Micro
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Koge Micro and Dow Jones
The main advantage of trading using opposite Koge Micro and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koge Micro 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.| Koge Micro vs. China Airlines | Koge Micro vs. Ever Clear Environmental Eng | Koge Micro vs. Tang Eng Iron | Koge Micro vs. Iron Force Industrial |
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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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