Correlation Between Dow Jones and Fuh Hwa
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Fuh Hwa 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 Fuh Hwa 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 Fuh Hwa 1 5, you can compare the effects of market volatilities on Dow Jones and Fuh Hwa 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 Fuh Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Fuh Hwa.
Diversification Opportunities for Dow Jones and Fuh Hwa
Very weak diversification
The 3 months correlation between Dow and Fuh is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Fuh Hwa 1 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuh Hwa 1 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 Fuh Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuh Hwa 1 has no effect on the direction of Dow Jones i.e., Dow Jones and Fuh Hwa go up and down completely randomly.
Pair Corralation between Dow Jones and Fuh Hwa
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 2.05 times more return on investment than Fuh Hwa. However, Dow Jones is 2.05 times more volatile than Fuh Hwa 1 5. It trades about 0.18 of its potential returns per unit of risk. Fuh Hwa 1 5 is currently generating about 0.07 per unit of risk. If you would invest 4,109,142 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 364,515 from holding Dow Jones Industrial or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Dow Jones Industrial vs. Fuh Hwa 1 5
Performance |
| Timeline |
Dow Jones and Fuh Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Fuh Hwa 1 5
Pair trading matchups for Fuh Hwa
Pair Trading with Dow Jones and Fuh Hwa
The main advantage of trading using opposite Dow Jones and Fuh Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Fuh Hwa 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 Fuh Hwa will offset losses from the drop in Fuh Hwa's long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |