Correlation Between Chicony Power and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Chicony Power 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 Chicony Power and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Power Technology and Dow Jones Industrial, you can compare the effects of market volatilities on Chicony Power 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 Chicony Power with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and Dow Jones.
Diversification Opportunities for Chicony Power and Dow Jones
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chicony and Dow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology 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 Chicony Power 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 Chicony Power Technology 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 Chicony Power i.e., Chicony Power and Dow Jones go up and down completely randomly.
Pair Corralation between Chicony Power and Dow Jones
Assuming the 90 days trading horizon Chicony Power Technology is expected to under-perform the Dow Jones. In addition to that, Chicony Power is 2.82 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 0.15 per unit of volatility. If you would invest 3,868,632 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 603,574 from holding Dow Jones Industrial or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. Dow Jones Industrial
Performance |
| Timeline |
Chicony Power and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Chicony Power Technology
Pair trading matchups for Chicony Power
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Chicony Power and Dow Jones
The main advantage of trading using opposite Chicony Power and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power 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.| Chicony Power vs. Merry Electronics Co | Chicony Power vs. E Lead Electronic Co | Chicony Power vs. Heran Co | Chicony Power vs. Zeng Hsing Industrial |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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