Correlation Between Dow Jones and Hanjinkal
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Hanjinkal 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 Hanjinkal 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 Hanjinkal, you can compare the effects of market volatilities on Dow Jones and Hanjinkal 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 Hanjinkal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Hanjinkal.
Diversification Opportunities for Dow Jones and Hanjinkal
Very weak diversification
The 3 months correlation between Dow and Hanjinkal is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Hanjinkal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjinkal 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 Hanjinkal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjinkal has no effect on the direction of Dow Jones i.e., Dow Jones and Hanjinkal go up and down completely randomly.
Pair Corralation between Dow Jones and Hanjinkal
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.95 times less return on investment than Hanjinkal. But when comparing it to its historical volatility, Dow Jones Industrial is 4.14 times less risky than Hanjinkal. It trades about 0.15 of its potential returns per unit of risk. Hanjinkal is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,370,000 in Hanjinkal on August 29, 2024 and sell it today you would earn a total of 1,560,000 from holding Hanjinkal or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Dow Jones Industrial vs. Hanjinkal
Performance |
| Timeline |
Dow Jones and Hanjinkal Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Hanjinkal
Pair trading matchups for Hanjinkal
Pair Trading with Dow Jones and Hanjinkal
The main advantage of trading using opposite Dow Jones and Hanjinkal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Hanjinkal 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 Hanjinkal will offset losses from the drop in Hanjinkal's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Hanjinkal vs. Korean Drug Co | Hanjinkal vs. Shinsegae Information Communication | Hanjinkal vs. CU Medical Systems | Hanjinkal vs. Inzi Display CoLtd |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |