Correlation Between Dow Jones and CTBC 20
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By analyzing existing cross correlation between Dow Jones Industrial and CTBC 20 Year, you can compare the effects of market volatilities on Dow Jones and CTBC 20 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 20. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CTBC 20.
Diversification Opportunities for Dow Jones and CTBC 20
Very good diversification
The 3 months correlation between Dow and CTBC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CTBC 20 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTBC 20 Year 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 20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTBC 20 Year has no effect on the direction of Dow Jones i.e., Dow Jones and CTBC 20 go up and down completely randomly.
Pair Corralation between Dow Jones and CTBC 20
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.15 times more return on investment than CTBC 20. However, Dow Jones is 1.15 times more volatile than CTBC 20 Year. It trades about 0.13 of its potential returns per unit of risk. CTBC 20 Year is currently generating about 0.04 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 | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Dow Jones Industrial vs. CTBC 20 Year
Performance |
| Timeline |
Dow Jones and CTBC 20 Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CTBC 20 Year
Pair trading matchups for CTBC 20
Pair Trading with Dow Jones and CTBC 20
The main advantage of trading using opposite Dow Jones and CTBC 20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, CTBC 20 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 20 will offset losses from the drop in CTBC 20'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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