Correlation Between Dow Jones and SUNEX SA
Can any of the company-specific risk be diversified away by investing in both Dow Jones and SUNEX SA 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 SUNEX SA 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 SUNEX SA, you can compare the effects of market volatilities on Dow Jones and SUNEX SA 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 SUNEX SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SUNEX SA.
Diversification Opportunities for Dow Jones and SUNEX SA
Very weak diversification
The 3 months correlation between Dow and SUNEX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SUNEX SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNEX SA 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 SUNEX SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNEX SA has no effect on the direction of Dow Jones i.e., Dow Jones and SUNEX SA go up and down completely randomly.
Pair Corralation between Dow Jones and SUNEX SA
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than SUNEX SA. However, Dow Jones Industrial is 4.86 times less risky than SUNEX SA. It trades about 0.1 of its potential returns per unit of risk. SUNEX SA is currently generating about -0.05 per unit of risk. If you would invest 3,181,914 in Dow Jones Industrial on December 1, 2024 and sell it today you would earn a total of 1,202,177 from holding Dow Jones Industrial or generate 37.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Dow Jones Industrial vs. SUNEX SA
Performance |
| Timeline |
Dow Jones and SUNEX SA Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SUNEX SA
Pair trading matchups for SUNEX SA
Pair Trading with Dow Jones and SUNEX SA
The main advantage of trading using opposite Dow Jones and SUNEX SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SUNEX SA 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 SUNEX SA will offset losses from the drop in SUNEX SA's long position.| Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
| SUNEX SA vs. Banco Santander SA | SUNEX SA vs. UniCredit SpA | SUNEX SA vs. CEZ as | SUNEX SA vs. Polski Koncern Naftowy |
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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