Correlation Between Dow Jones and Bangkok Airways
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Bangkok Airways 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 Bangkok Airways 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 Bangkok Airways Public, you can compare the effects of market volatilities on Dow Jones and Bangkok Airways 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 Bangkok Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bangkok Airways.
Diversification Opportunities for Dow Jones and Bangkok Airways
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Bangkok is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Bangkok Airways Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Airways Public 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 Bangkok Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Airways Public has no effect on the direction of Dow Jones i.e., Dow Jones and Bangkok Airways go up and down completely randomly.
Pair Corralation between Dow Jones and Bangkok Airways
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.36 times more return on investment than Bangkok Airways. However, Dow Jones Industrial is 2.77 times less risky than Bangkok Airways. It trades about 0.16 of its potential returns per unit of risk. Bangkok Airways Public is currently generating about 0.05 per unit of risk. If you would invest 3,871,129 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 619,936 from holding Dow Jones Industrial or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dow Jones Industrial vs. Bangkok Airways Public
Performance |
| Timeline |
Dow Jones and Bangkok Airways Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bangkok Airways Public
Pair trading matchups for Bangkok Airways
Pair Trading with Dow Jones and Bangkok Airways
The main advantage of trading using opposite Dow Jones and Bangkok Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Bangkok Airways 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 Bangkok Airways will offset losses from the drop in Bangkok Airways' long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Bangkok Airways vs. Asia Aviation Public | Bangkok Airways vs. Bangkok Dusit Medical | Bangkok Airways vs. Bangkok Expressway and | Bangkok Airways vs. Airports of Thailand |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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