Correlation Between Dow Jones and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Bosung Power 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 Dow Jones and Bosung Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Bosung Power Technology, you can compare the effects of market volatilities on Dow Jones and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bosung Power.
Diversification Opportunities for Dow Jones and Bosung Power
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Bosung is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Dow Jones i.e., Dow Jones and Bosung Power go up and down completely randomly.
Pair Corralation between Dow Jones and Bosung Power
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.49 times more return on investment than Bosung Power. However, Dow Jones Industrial is 2.03 times less risky than Bosung Power. It trades about 0.26 of its potential returns per unit of risk. Bosung Power Technology is currently generating about -0.18 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Bosung Power Technology
Performance |
| Timeline |
Dow Jones and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bosung Power Technology
Pair trading matchups for Bosung Power
Pair Trading with Dow Jones and Bosung Power
The main advantage of trading using opposite Dow Jones and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Bosung Power vs. Samsung Electronics Co | Bosung Power vs. Samsung Electronics Co | Bosung Power vs. KB Financial Group | Bosung Power vs. Shinhan Financial Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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