Correlation Between Dow Jones and Sino Horizon
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Sino Horizon 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 Sino Horizon 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 Sino Horizon Holdings, you can compare the effects of market volatilities on Dow Jones and Sino Horizon 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 Sino Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sino Horizon.
Diversification Opportunities for Dow Jones and Sino Horizon
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Sino is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sino Horizon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Horizon Holdings 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 Sino Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Horizon Holdings has no effect on the direction of Dow Jones i.e., Dow Jones and Sino Horizon go up and down completely randomly.
Pair Corralation between Dow Jones and Sino Horizon
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.13 times less return on investment than Sino Horizon. But when comparing it to its historical volatility, Dow Jones Industrial is 4.23 times less risky than Sino Horizon. It trades about 0.08 of its potential returns per unit of risk. Sino Horizon Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,215 in Sino Horizon Holdings on October 25, 2024 and sell it today you would earn a total of 225.00 from holding Sino Horizon Holdings or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sino Horizon Holdings
Performance |
| Timeline |
Dow Jones and Sino Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sino Horizon Holdings
Pair trading matchups for Sino Horizon
Pair Trading with Dow Jones and Sino Horizon
The main advantage of trading using opposite Dow Jones and Sino Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sino Horizon 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 Sino Horizon will offset losses from the drop in Sino Horizon's long position.| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
| Sino Horizon vs. Kee Tai Properties | Sino Horizon vs. Hung Sheng Construction | Sino Horizon vs. BES Engineering Co | Sino Horizon vs. Chainqui Construction Development |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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