Correlation Between Dow Jones and Samhyun
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Samhyun 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 Samhyun 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 Samhyun, you can compare the effects of market volatilities on Dow Jones and Samhyun 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 Samhyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Samhyun.
Diversification Opportunities for Dow Jones and Samhyun
Very good diversification
The 3 months correlation between Dow and Samhyun is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Samhyun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun 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 Samhyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun has no effect on the direction of Dow Jones i.e., Dow Jones and Samhyun go up and down completely randomly.
Pair Corralation between Dow Jones and Samhyun
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.14 times more return on investment than Samhyun. However, Dow Jones Industrial is 6.92 times less risky than Samhyun. It trades about -0.23 of its potential returns per unit of risk. Samhyun is currently generating about -0.08 per unit of risk. If you would invest 4,486,031 in Dow Jones Industrial on September 27, 2024 and sell it today you would lose (156,328) from holding Dow Jones Industrial or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Samhyun
Performance |
| Timeline |
Dow Jones and Samhyun Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Samhyun
Pair trading matchups for Samhyun
Pair Trading with Dow Jones and Samhyun
The main advantage of trading using opposite Dow Jones and Samhyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Samhyun 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 Samhyun will offset losses from the drop in Samhyun's long position.| Dow Jones vs. 51Talk Online Education | Dow Jones vs. World Houseware Limited | Dow Jones vs. Beauty Health Co | Dow Jones vs. Acme United |
| Samhyun vs. Samsung Electronics Co | Samhyun vs. Samsung Electronics Co | Samhyun vs. LG Energy Solution | Samhyun vs. SK Hynix |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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