Correlation Between Dow Jones and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both Dow Jones and SAIHEAT 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 SAIHEAT 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 SAIHEAT Limited, you can compare the effects of market volatilities on Dow Jones and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SAIHEAT.
Diversification Opportunities for Dow Jones and SAIHEAT
Poor diversification
The 3 months correlation between Dow and SAIHEAT is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Dow Jones i.e., Dow Jones and SAIHEAT go up and down completely randomly.
Pair Corralation between Dow Jones and SAIHEAT
Assuming the 90 days trading horizon Dow Jones is expected to generate 49.73 times less return on investment than SAIHEAT. But when comparing it to its historical volatility, Dow Jones Industrial is 40.38 times less risky than SAIHEAT. It trades about 0.12 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4.00 in SAIHEAT Limited on August 26, 2024 and sell it today you would earn a total of 11.00 from holding SAIHEAT Limited or generate 275.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 42.17% |
| Values | Daily Returns |
Dow Jones Industrial vs. SAIHEAT Limited
Performance |
| Timeline |
Dow Jones and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SAIHEAT Limited
Pair trading matchups for SAIHEAT
Pair Trading with Dow Jones and SAIHEAT
The main advantage of trading using opposite Dow Jones and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| SAIHEAT vs. Kandi Technologies Group | SAIHEAT vs. Grupo Televisa SAB | SAIHEAT vs. Xponential Fitness | SAIHEAT vs. Lipocine |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |