Correlation Between Dow Jones and HKT Trust
Can any of the company-specific risk be diversified away by investing in both Dow Jones and HKT Trust 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 HKT Trust 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 HKT Trust ADR, you can compare the effects of market volatilities on Dow Jones and HKT Trust 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 HKT Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and HKT Trust.
Diversification Opportunities for Dow Jones and HKT Trust
Very good diversification
The 3 months correlation between Dow and HKT is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and HKT Trust ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HKT Trust ADR 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 HKT Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HKT Trust ADR has no effect on the direction of Dow Jones i.e., Dow Jones and HKT Trust go up and down completely randomly.
Pair Corralation between Dow Jones and HKT Trust
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.18 times more return on investment than HKT Trust. However, Dow Jones Industrial is 5.63 times less risky than HKT Trust. It trades about 0.26 of its potential returns per unit of risk. HKT Trust ADR is currently generating about 0.0 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. HKT Trust ADR
Performance |
| Timeline |
Dow Jones and HKT Trust Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
HKT Trust ADR
Pair trading matchups for HKT Trust
Pair Trading with Dow Jones and HKT Trust
The main advantage of trading using opposite Dow Jones and HKT Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, HKT Trust 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 HKT Trust will offset losses from the drop in HKT Trust's long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| HKT Trust vs. Vodafone Group PLC | HKT Trust vs. KDDI Corp | HKT Trust vs. Amrica Mvil, SAB | HKT Trust vs. ATT Inc |
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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