Correlation Between Dow Jones and Globetronics Tech
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Globetronics Tech 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 Globetronics Tech 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 Globetronics Tech Bhd, you can compare the effects of market volatilities on Dow Jones and Globetronics Tech 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 Globetronics Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Globetronics Tech.
Diversification Opportunities for Dow Jones and Globetronics Tech
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Globetronics is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Globetronics Tech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globetronics Tech Bhd 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 Globetronics Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globetronics Tech Bhd has no effect on the direction of Dow Jones i.e., Dow Jones and Globetronics Tech go up and down completely randomly.
Pair Corralation between Dow Jones and Globetronics Tech
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.22 times more return on investment than Globetronics Tech. However, Dow Jones Industrial is 4.54 times less risky than Globetronics Tech. It trades about 0.08 of its potential returns per unit of risk. Globetronics Tech Bhd is currently generating about -0.03 per unit of risk. If you would invest 3,324,156 in Dow Jones Industrial on September 14, 2024 and sell it today you would earn a total of 1,067,256 from holding Dow Jones Industrial or generate 32.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.77% |
| Values | Daily Returns |
Dow Jones Industrial vs. Globetronics Tech Bhd
Performance |
| Timeline |
Dow Jones and Globetronics Tech Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Globetronics Tech Bhd
Pair trading matchups for Globetronics Tech
Pair Trading with Dow Jones and Globetronics Tech
The main advantage of trading using opposite Dow Jones and Globetronics Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Globetronics Tech 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 Globetronics Tech will offset losses from the drop in Globetronics Tech's long position.| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
| Globetronics Tech vs. Carlsberg Brewery Malaysia | Globetronics Tech vs. Diversified Gateway Solutions | Globetronics Tech vs. Dataprep Holdings Bhd | Globetronics Tech vs. Uchi Technologies 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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