Correlation Between Dow Jones and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Dow Jones and SGA Solutions 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 SGA Solutions 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 SGA Solutions CoLtd, you can compare the effects of market volatilities on Dow Jones and SGA Solutions 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 SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SGA Solutions.
Diversification Opportunities for Dow Jones and SGA Solutions
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and SGA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions CoLtd 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 SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of Dow Jones i.e., Dow Jones and SGA Solutions go up and down completely randomly.
Pair Corralation between Dow Jones and SGA Solutions
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the SGA Solutions. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 3.88 times less risky than SGA Solutions. The index trades about -0.09 of its potential returns per unit of risk. The SGA Solutions CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 47,714 in SGA Solutions CoLtd on October 16, 2024 and sell it today you would earn a total of 986.00 from holding SGA Solutions CoLtd or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. SGA Solutions CoLtd
Performance |
| Timeline |
Dow Jones and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SGA Solutions CoLtd
Pair trading matchups for SGA Solutions
Pair Trading with Dow Jones and SGA Solutions
The main advantage of trading using opposite Dow Jones and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.| Dow Jones vs. Gfl Environmental Holdings | Dow Jones vs. Lizhan Environmental | Dow Jones vs. Grupo Simec SAB | Dow Jones vs. Constellation Brands Class |
| SGA Solutions vs. KMH Hitech Co | SGA Solutions vs. GemVaxKAEL CoLtd | SGA Solutions vs. Bosung Power Technology | SGA Solutions vs. Busan Industrial Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |