Correlation Between Nan Pao and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Nan Pao 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 Nan Pao and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Pao Resins and Dow Jones Industrial, you can compare the effects of market volatilities on Nan Pao 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 Nan Pao with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Pao and Dow Jones.
Diversification Opportunities for Nan Pao and Dow Jones
Weak diversification
The 3 months correlation between Nan and Dow is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nan Pao Resins 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 Nan Pao 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 Nan Pao Resins 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 Nan Pao i.e., Nan Pao and Dow Jones go up and down completely randomly.
Pair Corralation between Nan Pao and Dow Jones
Assuming the 90 days trading horizon Nan Pao Resins is expected to generate 2.29 times more return on investment than Dow Jones. However, Nan Pao is 2.29 times more volatile than Dow Jones Industrial. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 28,350 in Nan Pao Resins on August 30, 2024 and sell it today you would earn a total of 3,950 from holding Nan Pao Resins or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Pao Resins vs. Dow Jones Industrial
Performance |
| Timeline |
Nan Pao and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Nan Pao Resins
Pair trading matchups for Nan Pao
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nan Pao and Dow Jones
The main advantage of trading using opposite Nan Pao and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Pao 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.| Nan Pao vs. Sinopac Financial Holdings | Nan Pao vs. Integrated Service Technology | Nan Pao vs. Microtips Technology | Nan Pao vs. Tehmag Foods |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |