Correlation Between Dow Jones and Central Pattana
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Central Pattana 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 Central Pattana 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 Central Pattana Public, you can compare the effects of market volatilities on Dow Jones and Central Pattana 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 Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Central Pattana.
Diversification Opportunities for Dow Jones and Central Pattana
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Central is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana 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 Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of Dow Jones i.e., Dow Jones and Central Pattana go up and down completely randomly.
Pair Corralation between Dow Jones and Central Pattana
Assuming the 90 days trading horizon Dow Jones is expected to generate 157.26 times less return on investment than Central Pattana. But when comparing it to its historical volatility, Dow Jones Industrial is 191.15 times less risky than Central Pattana. It trades about 0.17 of its potential returns per unit of risk. Central Pattana Public is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,575 in Central Pattana Public on August 29, 2024 and sell it today you would lose (500.00) from holding Central Pattana Public or give up 7.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.35% |
| Values | Daily Returns |
Dow Jones Industrial vs. Central Pattana Public
Performance |
| Timeline |
Dow Jones and Central Pattana Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Central Pattana Public
Pair trading matchups for Central Pattana
Pair Trading with Dow Jones and Central Pattana
The main advantage of trading using opposite Dow Jones and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Central Pattana 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 Central Pattana will offset losses from the drop in Central Pattana's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Central Pattana vs. CP ALL Public | Central Pattana vs. Airports of Thailand | Central Pattana vs. Bangkok Expressway and | Central Pattana vs. The Siam Cement |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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