Correlation Between I Sheng and Dow Jones
Can any of the company-specific risk be diversified away by investing in both I Sheng 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 I Sheng and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Sheng Electric Wire and Dow Jones Industrial, you can compare the effects of market volatilities on I Sheng 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 I Sheng with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Sheng and Dow Jones.
Diversification Opportunities for I Sheng and Dow Jones
Modest diversification
The 3 months correlation between 6115 and Dow is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding I Sheng Electric Wire 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 I Sheng 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 I Sheng Electric Wire 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 I Sheng i.e., I Sheng and Dow Jones go up and down completely randomly.
Pair Corralation between I Sheng and Dow Jones
Assuming the 90 days trading horizon I Sheng Electric Wire is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, I Sheng Electric Wire is 1.58 times less risky than Dow Jones. The stock trades about -0.1 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,290,695 in Dow Jones Industrial on October 22, 2024 and sell it today you would earn a total of 58,088 from holding Dow Jones Industrial or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
I Sheng Electric Wire vs. Dow Jones Industrial
Performance |
| Timeline |
I Sheng and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
I Sheng Electric Wire
Pair trading matchups for I Sheng
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with I Sheng and Dow Jones
The main advantage of trading using opposite I Sheng and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Sheng 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.| I Sheng vs. Basso Industry Corp | I Sheng vs. Kaulin Mfg | I Sheng vs. TYC Brother Industrial | I Sheng vs. Chung Hsin Electric Machinery |
| Dow Jones vs. Nasdaq Inc | Dow Jones vs. Summit Materials | Dow Jones vs. Vulcan Materials | Dow Jones vs. Celsius Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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