Correlation Between Dow Jones and Thaifoods Group
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Thaifoods Group 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 Thaifoods Group 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 Thaifoods Group Public, you can compare the effects of market volatilities on Dow Jones and Thaifoods Group 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 Thaifoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Thaifoods Group.
Diversification Opportunities for Dow Jones and Thaifoods Group
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and Thaifoods is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Thaifoods Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaifoods Group Public 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 Thaifoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaifoods Group Public has no effect on the direction of Dow Jones i.e., Dow Jones and Thaifoods Group go up and down completely randomly.
Pair Corralation between Dow Jones and Thaifoods Group
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.45 times more return on investment than Thaifoods Group. However, Dow Jones Industrial is 2.21 times less risky than Thaifoods Group. It trades about 0.38 of its potential returns per unit of risk. Thaifoods Group Public is currently generating about -0.22 per unit of risk. If you would invest 4,179,460 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 311,605 from holding Dow Jones Industrial or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dow Jones Industrial vs. Thaifoods Group Public
Performance |
| Timeline |
Dow Jones and Thaifoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Thaifoods Group Public
Pair trading matchups for Thaifoods Group
Pair Trading with Dow Jones and Thaifoods Group
The main advantage of trading using opposite Dow Jones and Thaifoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Thaifoods Group 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 Thaifoods Group will offset losses from the drop in Thaifoods Group's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Thaifoods Group vs. Thaifoods Group Public | Thaifoods Group vs. Thai President Foods | Thaifoods Group vs. Thai Capital | Thaifoods Group vs. Thaicom Public |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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