Correlation Between Dow Jones and CTBC USD
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By analyzing existing cross correlation between Dow Jones Industrial and CTBC USD Corporate, you can compare the effects of market volatilities on Dow Jones and CTBC USD 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 CTBC USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CTBC USD.
Diversification Opportunities for Dow Jones and CTBC USD
Very good diversification
The 3 months correlation between Dow and CTBC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CTBC USD Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC USD Corporate 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 CTBC USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC USD Corporate has no effect on the direction of Dow Jones i.e., Dow Jones and CTBC USD go up and down completely randomly.
Pair Corralation between Dow Jones and CTBC USD
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.3 times more return on investment than CTBC USD. However, Dow Jones is 1.3 times more volatile than CTBC USD Corporate. It trades about 0.13 of its potential returns per unit of risk. CTBC USD Corporate is currently generating about 0.05 per unit of risk. If you would invest 3,611,738 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 879,327 from holding Dow Jones Industrial or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Dow Jones Industrial vs. CTBC USD Corporate
Performance |
| Timeline |
Dow Jones and CTBC USD Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CTBC USD Corporate
Pair trading matchups for CTBC USD
Pair Trading with Dow Jones and CTBC USD
The main advantage of trading using opposite Dow Jones and CTBC USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, CTBC USD 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 CTBC USD will offset losses from the drop in CTBC USD's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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