Correlation Between Bayport International and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bayport International 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 Bayport International and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayport International Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on Bayport International 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 Bayport International with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayport International and Dow Jones.
Diversification Opportunities for Bayport International and Dow Jones
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayport and Dow is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bayport International Holdings 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 Bayport International 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 Bayport International Holdings 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 Bayport International i.e., Bayport International and Dow Jones go up and down completely randomly.
Pair Corralation between Bayport International and Dow Jones
Given the investment horizon of 90 days Bayport International Holdings is expected to generate 120.78 times more return on investment than Dow Jones. However, Bayport International is 120.78 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 0.55 in Bayport International Holdings on September 3, 2024 and sell it today you would lose (0.54) from holding Bayport International Holdings or give up 98.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bayport International Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
Bayport International and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bayport International Holdings
Pair trading matchups for Bayport International
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bayport International and Dow Jones
The main advantage of trading using opposite Bayport International and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayport International 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.| Bayport International vs. Sino Land Co | Bayport International vs. Hong Kong Land | Bayport International vs. Holiday Island Holdings | Bayport International vs. Sun Hung Kai |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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