Correlation Between Dow Jones and Thachang Green
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Thachang Green 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 Thachang Green 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 Thachang Green Energy, you can compare the effects of market volatilities on Dow Jones and Thachang Green 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 Thachang Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Thachang Green.
Diversification Opportunities for Dow Jones and Thachang Green
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Thachang is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Thachang Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thachang Green Energy 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 Thachang Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thachang Green Energy has no effect on the direction of Dow Jones i.e., Dow Jones and Thachang Green go up and down completely randomly.
Pair Corralation between Dow Jones and Thachang Green
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Thachang Green. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 2.07 times less risky than Thachang Green. The index trades about -0.27 of its potential returns per unit of risk. The Thachang Green Energy is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Thachang Green Energy on October 7, 2024 and sell it today you would lose (8.00) from holding Thachang Green Energy or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Dow Jones Industrial vs. Thachang Green Energy
Performance |
| Timeline |
Dow Jones and Thachang Green Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Thachang Green Energy
Pair trading matchups for Thachang Green
Pair Trading with Dow Jones and Thachang Green
The main advantage of trading using opposite Dow Jones and Thachang Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Thachang Green 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 Thachang Green will offset losses from the drop in Thachang Green's long position.| Dow Jones vs. NetSol Technologies | Dow Jones vs. Q2 Holdings | Dow Jones vs. Weyco Group | Dow Jones vs. Newell Brands |
| Thachang Green vs. TKS Technologies Public | Thachang Green vs. Susco Public | Thachang Green vs. Gulf Energy Development | Thachang Green vs. The Erawan Group |
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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