Correlation Between Dow Jones and FSPG Hi-Tech
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By analyzing existing cross correlation between Dow Jones Industrial and FSPG Hi Tech Co, you can compare the effects of market volatilities on Dow Jones and FSPG Hi-Tech 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 Dow Jones with a short position of FSPG Hi-Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and FSPG Hi-Tech.
Diversification Opportunities for Dow Jones and FSPG Hi-Tech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and FSPG is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and FSPG Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSPG Hi Tech and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with FSPG Hi-Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSPG Hi Tech has no effect on the direction of Dow Jones i.e., Dow Jones and FSPG Hi-Tech go up and down completely randomly.
Pair Corralation between Dow Jones and FSPG Hi-Tech
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the FSPG Hi-Tech. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 4.28 times less risky than FSPG Hi-Tech. The index trades about -0.22 of its potential returns per unit of risk. The FSPG Hi Tech Co is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 558.00 in FSPG Hi Tech Co on November 27, 2024 and sell it today you would earn a total of 107.00 from holding FSPG Hi Tech Co or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. FSPG Hi Tech Co
Performance |
| Timeline |
Dow Jones and FSPG Hi-Tech Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
FSPG Hi Tech Co
Pair trading matchups for FSPG Hi-Tech
Pair Trading with Dow Jones and FSPG Hi-Tech
The main advantage of trading using opposite Dow Jones and FSPG Hi-Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, FSPG Hi-Tech 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 FSPG Hi-Tech will offset losses from the drop in FSPG Hi-Tech's long position.The idea behind Dow Jones Industrial and FSPG Hi Tech Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FSPG Hi-Tech vs. Tangel Publishing | FSPG Hi-Tech vs. Offcn Education Technology | FSPG Hi-Tech vs. China Publishing Media | FSPG Hi-Tech vs. Zhengzhou Coal Mining |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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