Correlation Between Eastern Polymer and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eastern Polymer and Dow Jones 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 Eastern Polymer and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Polymer Group and Dow Jones Industrial, you can compare the effects of market volatilities on Eastern Polymer and Dow Jones 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 Eastern Polymer with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Polymer and Dow Jones.
Diversification Opportunities for Eastern Polymer and Dow Jones
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastern and Dow is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Polymer Group and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Eastern Polymer 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 Eastern Polymer Group are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Eastern Polymer i.e., Eastern Polymer and Dow Jones go up and down completely randomly.
Pair Corralation between Eastern Polymer and Dow Jones
Assuming the 90 days trading horizon Eastern Polymer Group is expected to under-perform the Dow Jones. In addition to that, Eastern Polymer is 3.42 times more volatile than Dow Jones Industrial. It trades about -0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,515,104 in Dow Jones Industrial on September 14, 2024 and sell it today you would earn a total of 876,308 from holding Dow Jones Industrial or generate 24.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.64% |
| Values | Daily Returns |
Eastern Polymer Group vs. Dow Jones Industrial
Performance |
| Timeline |
Eastern Polymer and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eastern Polymer Group
Pair trading matchups for Eastern Polymer
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eastern Polymer and Dow Jones
The main advantage of trading using opposite Eastern Polymer and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Polymer position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Eastern Polymer vs. Thantawan Industry Public | Eastern Polymer vs. The Erawan Group | Eastern Polymer vs. Jay Mart Public | Eastern Polymer vs. Airports of Thailand |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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