Correlation Between Dow Jones and Vietnam Technological
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Vietnam Technological 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 Vietnam Technological 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 Vietnam Technological And, you can compare the effects of market volatilities on Dow Jones and Vietnam Technological 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 Vietnam Technological. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Vietnam Technological.
Diversification Opportunities for Dow Jones and Vietnam Technological
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Vietnam is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And 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 Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of Dow Jones i.e., Dow Jones and Vietnam Technological go up and down completely randomly.
Pair Corralation between Dow Jones and Vietnam Technological
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.6 times more return on investment than Vietnam Technological. However, Dow Jones Industrial is 1.65 times less risky than Vietnam Technological. It trades about 0.33 of its potential returns per unit of risk. Vietnam Technological And is currently generating about 0.18 per unit of risk. If you would invest 4,270,656 in Dow Jones Industrial on November 7, 2024 and sell it today you would earn a total of 216,672 from holding Dow Jones Industrial or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Dow Jones Industrial vs. Vietnam Technological And
Performance |
| Timeline |
Dow Jones and Vietnam Technological Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Vietnam Technological And
Pair trading matchups for Vietnam Technological
Pair Trading with Dow Jones and Vietnam Technological
The main advantage of trading using opposite Dow Jones and Vietnam Technological positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Vietnam Technological 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 Vietnam Technological will offset losses from the drop in Vietnam Technological's long position.| Dow Jones vs. Viemed Healthcare | Dow Jones vs. Alphatec Holdings | Dow Jones vs. Tandem Diabetes Care | Dow Jones vs. Alvotech |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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