Correlation Between Dow Jones and SCG PACKAGING
Can any of the company-specific risk be diversified away by investing in both Dow Jones and SCG PACKAGING 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 SCG PACKAGING 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 SCG PACKAGING FGN , you can compare the effects of market volatilities on Dow Jones and SCG PACKAGING 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 SCG PACKAGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SCG PACKAGING.
Diversification Opportunities for Dow Jones and SCG PACKAGING
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and SCG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SCG PACKAGING FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG PACKAGING FGN 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 SCG PACKAGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG PACKAGING FGN has no effect on the direction of Dow Jones i.e., Dow Jones and SCG PACKAGING go up and down completely randomly.
Pair Corralation between Dow Jones and SCG PACKAGING
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.47 times less return on investment than SCG PACKAGING. But when comparing it to its historical volatility, Dow Jones Industrial is 7.14 times less risky than SCG PACKAGING. It trades about 0.09 of its potential returns per unit of risk. SCG PACKAGING FGN is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 33.00 in SCG PACKAGING FGN on August 31, 2024 and sell it today you would earn a total of 26.00 from holding SCG PACKAGING FGN or generate 78.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.35% |
| Values | Daily Returns |
Dow Jones Industrial vs. SCG PACKAGING FGN
Performance |
| Timeline |
Dow Jones and SCG PACKAGING Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SCG PACKAGING FGN
Pair trading matchups for SCG PACKAGING
Pair Trading with Dow Jones and SCG PACKAGING
The main advantage of trading using opposite Dow Jones and SCG PACKAGING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SCG PACKAGING 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 SCG PACKAGING will offset losses from the drop in SCG PACKAGING's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| SCG PACKAGING vs. Packaging of | SCG PACKAGING vs. Smurfit Kappa Group | SCG PACKAGING vs. Superior Plus Corp | SCG PACKAGING vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |