Correlation Between Dow Jones and Delta Asia
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Delta Asia 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 Delta Asia 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 Delta Asia International, you can compare the effects of market volatilities on Dow Jones and Delta Asia 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 Delta Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Delta Asia.
Diversification Opportunities for Dow Jones and Delta Asia
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Delta is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Delta Asia International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Asia International 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 Delta Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Asia International has no effect on the direction of Dow Jones i.e., Dow Jones and Delta Asia go up and down completely randomly.
Pair Corralation between Dow Jones and Delta Asia
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.69 times more return on investment than Delta Asia. However, Dow Jones Industrial is 1.44 times less risky than Delta Asia. It trades about 0.37 of its potential returns per unit of risk. Delta Asia International is currently generating about -0.06 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dow Jones Industrial vs. Delta Asia International
Performance |
| Timeline |
Dow Jones and Delta Asia Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Delta Asia International
Pair trading matchups for Delta Asia
Pair Trading with Dow Jones and Delta Asia
The main advantage of trading using opposite Dow Jones and Delta Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Delta Asia 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 Delta Asia will offset losses from the drop in Delta Asia's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Delta Asia vs. Universal Vision Biotechnology | Delta Asia vs. Excelsior Medical Co | Delta Asia vs. Hi Clearance | Delta Asia vs. Brighten Optix |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |