Correlation Between FIH Mobile and Dow Jones
Can any of the company-specific risk be diversified away by investing in both FIH Mobile 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 FIH Mobile and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIH Mobile Limited and Dow Jones Industrial, you can compare the effects of market volatilities on FIH Mobile 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 FIH Mobile with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIH Mobile and Dow Jones.
Diversification Opportunities for FIH Mobile and Dow Jones
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FIH and Dow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding FIH Mobile Limited 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 FIH Mobile 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 FIH Mobile Limited 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 FIH Mobile i.e., FIH Mobile and Dow Jones go up and down completely randomly.
Pair Corralation between FIH Mobile and Dow Jones
Assuming the 90 days horizon FIH Mobile Limited is expected to generate 9.24 times more return on investment than Dow Jones. However, FIH Mobile is 9.24 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 5.45 in FIH Mobile Limited on August 27, 2024 and sell it today you would earn a total of 4.55 from holding FIH Mobile Limited or generate 83.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
FIH Mobile Limited vs. Dow Jones Industrial
Performance |
| Timeline |
FIH Mobile and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
FIH Mobile Limited
Pair trading matchups for FIH Mobile
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with FIH Mobile and Dow Jones
The main advantage of trading using opposite FIH Mobile and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH Mobile 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.| FIH Mobile vs. FORMPIPE SOFTWARE AB | FIH Mobile vs. Constellation Software | FIH Mobile vs. MAGIC SOFTWARE ENTR | FIH Mobile vs. PTT Global Chemical |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |