Correlation Between Dow Jones and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Saigon Machinery 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 Saigon Machinery 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 Saigon Machinery Spare, you can compare the effects of market volatilities on Dow Jones and Saigon Machinery 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 Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Saigon Machinery.
Diversification Opportunities for Dow Jones and Saigon Machinery
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Saigon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare 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 Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of Dow Jones i.e., Dow Jones and Saigon Machinery go up and down completely randomly.
Pair Corralation between Dow Jones and Saigon Machinery
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Saigon Machinery. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 3.55 times less risky than Saigon Machinery. The index trades about -0.19 of its potential returns per unit of risk. The Saigon Machinery Spare is currently generating about 1.03 of returns per unit of risk over similar time horizon. If you would invest 1,090,000 in Saigon Machinery Spare on October 16, 2024 and sell it today you would earn a total of 510,000 from holding Saigon Machinery Spare or generate 46.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.16% |
| Values | Daily Returns |
Dow Jones Industrial vs. Saigon Machinery Spare
Performance |
| Timeline |
Dow Jones and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Saigon Machinery Spare
Pair trading matchups for Saigon Machinery
Pair Trading with Dow Jones and Saigon Machinery
The main advantage of trading using opposite Dow Jones and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Saigon Machinery 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 Saigon Machinery will offset losses from the drop in Saigon Machinery's long position.| Dow Jones vs. Gfl Environmental Holdings | Dow Jones vs. Lizhan Environmental | Dow Jones vs. Grupo Simec SAB | Dow Jones vs. Constellation Brands Class |
| Saigon Machinery vs. FIT INVEST JSC | Saigon Machinery vs. Damsan JSC | Saigon Machinery vs. An Phat Plastic | Saigon Machinery vs. APG Securities Joint |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |