Correlation Between Dow Jones and Senheng New
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Senheng New 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 Senheng New 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 Senheng New Retail, you can compare the effects of market volatilities on Dow Jones and Senheng New 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 Senheng New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Senheng New.
Diversification Opportunities for Dow Jones and Senheng New
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Senheng is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Senheng New Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senheng New Retail 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 Senheng New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senheng New Retail has no effect on the direction of Dow Jones i.e., Dow Jones and Senheng New go up and down completely randomly.
Pair Corralation between Dow Jones and Senheng New
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.24 times more return on investment than Senheng New. However, Dow Jones Industrial is 4.15 times less risky than Senheng New. It trades about 0.17 of its potential returns per unit of risk. Senheng New Retail is currently generating about -0.1 per unit of risk. If you would invest 4,234,224 in Dow Jones Industrial on October 20, 2024 and sell it today you would earn a total of 114,559 from holding Dow Jones Industrial or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dow Jones Industrial vs. Senheng New Retail
Performance |
| Timeline |
Dow Jones and Senheng New Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Senheng New Retail
Pair trading matchups for Senheng New
Pair Trading with Dow Jones and Senheng New
The main advantage of trading using opposite Dow Jones and Senheng New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Senheng New 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 Senheng New will offset losses from the drop in Senheng New's long position.| Dow Jones vs. SkyWest | Dow Jones vs. Air Transport Services | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Emerson Radio |
| Senheng New vs. DC HEALTHCARE HOLDINGS | Senheng New vs. Choo Bee Metal | Senheng New vs. Awanbiru Technology Bhd | Senheng New vs. Eonmetall Group Bhd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |