Correlation Between Dow Jones and 36Kr Holdings
Can any of the company-specific risk be diversified away by investing in both Dow Jones and 36Kr Holdings 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 36Kr Holdings 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 36Kr Holdings, you can compare the effects of market volatilities on Dow Jones and 36Kr Holdings 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 36Kr Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and 36Kr Holdings.
Diversification Opportunities for Dow Jones and 36Kr Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and 36Kr is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and 36Kr Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 36Kr Holdings 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 36Kr Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 36Kr Holdings has no effect on the direction of Dow Jones i.e., Dow Jones and 36Kr Holdings go up and down completely randomly.
Pair Corralation between Dow Jones and 36Kr Holdings
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.24 times more return on investment than 36Kr Holdings. However, Dow Jones Industrial is 4.09 times less risky than 36Kr Holdings. It trades about 0.27 of its potential returns per unit of risk. 36Kr Holdings is currently generating about -0.33 per unit of risk. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. 36Kr Holdings
Performance |
| Timeline |
Dow Jones and 36Kr Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
36Kr Holdings
Pair trading matchups for 36Kr Holdings
Pair Trading with Dow Jones and 36Kr Holdings
The main advantage of trading using opposite Dow Jones and 36Kr Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, 36Kr Holdings 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 36Kr Holdings will offset losses from the drop in 36Kr Holdings' long position.| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
| 36Kr Holdings vs. Alphabet Inc Class C | 36Kr Holdings vs. Twilio Inc | 36Kr Holdings vs. Snap Inc | 36Kr Holdings vs. Baidu 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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