Correlation Between Dow Jones and Singapore Technologies
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Singapore Technologies 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 Singapore Technologies 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 Singapore Technologies Engineering, you can compare the effects of market volatilities on Dow Jones and Singapore Technologies 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 Singapore Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Singapore Technologies.
Diversification Opportunities for Dow Jones and Singapore Technologies
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Singapore is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies 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 Singapore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Technologies has no effect on the direction of Dow Jones i.e., Dow Jones and Singapore Technologies go up and down completely randomly.
Pair Corralation between Dow Jones and Singapore Technologies
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.17 times less return on investment than Singapore Technologies. But when comparing it to its historical volatility, Dow Jones Industrial is 2.95 times less risky than Singapore Technologies. It trades about 0.14 of its potential returns per unit of risk. Singapore Technologies Engineering is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,856 in Singapore Technologies Engineering on September 3, 2024 and sell it today you would earn a total of 408.00 from holding Singapore Technologies Engineering or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.58% |
| Values | Daily Returns |
Dow Jones Industrial vs. Singapore Technologies Enginee
Performance |
| Timeline |
Dow Jones and Singapore Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Singapore Technologies Engineering
Pair trading matchups for Singapore Technologies
Pair Trading with Dow Jones and Singapore Technologies
The main advantage of trading using opposite Dow Jones and Singapore Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Singapore Technologies 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 Singapore Technologies will offset losses from the drop in Singapore Technologies' long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Singapore Technologies vs. Airbus Group SE | Singapore Technologies vs. Safran SA | Singapore Technologies vs. Embraer SA ADR | Singapore Technologies vs. BAE Systems PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |