Correlation Between FGV Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both FGV Holdings 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 FGV Holdings and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FGV Holdings Bhd and Dow Jones Industrial, you can compare the effects of market volatilities on FGV Holdings 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 FGV Holdings with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of FGV Holdings and Dow Jones.
Diversification Opportunities for FGV Holdings and Dow Jones
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between FGV and Dow is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding FGV Holdings Bhd 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 FGV Holdings 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 FGV Holdings Bhd 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 FGV Holdings i.e., FGV Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between FGV Holdings and Dow Jones
Assuming the 90 days trading horizon FGV Holdings is expected to generate 3.84 times less return on investment than Dow Jones. In addition to that, FGV Holdings is 1.56 times more volatile than Dow Jones Industrial. It trades about 0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 321,944 from holding Dow Jones Industrial or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FGV Holdings Bhd vs. Dow Jones Industrial
Performance |
| Timeline |
FGV Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
FGV Holdings Bhd
Pair trading matchups for FGV Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with FGV Holdings and Dow Jones
The main advantage of trading using opposite FGV Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FGV Holdings 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.| FGV Holdings vs. Cloudpoint Technology Berhad | FGV Holdings vs. Cosmos Technology International | FGV Holdings vs. Carlsberg Brewery Malaysia | FGV Holdings vs. Berjaya Food Bhd |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |