Correlation Between HIGHTECH PAYMENT and Dow Jones
Can any of the company-specific risk be diversified away by investing in both HIGHTECH PAYMENT 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 HIGHTECH PAYMENT and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIGHTECH PAYMENT SYSTEMS and Dow Jones Industrial, you can compare the effects of market volatilities on HIGHTECH PAYMENT 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 HIGHTECH PAYMENT with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIGHTECH PAYMENT and Dow Jones.
Diversification Opportunities for HIGHTECH PAYMENT and Dow Jones
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HIGHTECH and Dow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding HIGHTECH PAYMENT SYSTEMS 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 HIGHTECH PAYMENT 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 HIGHTECH PAYMENT SYSTEMS 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 HIGHTECH PAYMENT i.e., HIGHTECH PAYMENT and Dow Jones go up and down completely randomly.
Pair Corralation between HIGHTECH PAYMENT and Dow Jones
Assuming the 90 days trading horizon HIGHTECH PAYMENT SYSTEMS is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, HIGHTECH PAYMENT SYSTEMS is 1.13 times less risky than Dow Jones. The stock trades about -0.11 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 4,184,163 in Dow Jones Industrial on January 16, 2025 and sell it today you would lose (147,267) from holding Dow Jones Industrial or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
HIGHTECH PAYMENT SYSTEMS vs. Dow Jones Industrial
Performance |
| Timeline |
HIGHTECH PAYMENT and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
HIGHTECH PAYMENT SYSTEMS
Pair trading matchups for HIGHTECH PAYMENT
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with HIGHTECH PAYMENT and Dow Jones
The main advantage of trading using opposite HIGHTECH PAYMENT and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIGHTECH PAYMENT 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.| HIGHTECH PAYMENT vs. MICRODATA | HIGHTECH PAYMENT vs. BANK OF AFRICA | HIGHTECH PAYMENT vs. MED PAPER | HIGHTECH PAYMENT vs. ALLIANCES DEVELOPPEMENT IMMOBILIER |
| Dow Jones vs. Constellation Brands Class | Dow Jones vs. Keurig Dr Pepper | Dow Jones vs. Sonos Inc | Dow Jones vs. Fevertree Drinks Plc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |