Correlation Between Haier Smart and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Haier Smart 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 Haier Smart and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and Dow Jones Industrial, you can compare the effects of market volatilities on Haier Smart 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 Haier Smart with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Dow Jones.
Diversification Opportunities for Haier Smart and Dow Jones
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haier and Dow is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home 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 Haier Smart 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 Haier Smart Home 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 Haier Smart i.e., Haier Smart and Dow Jones go up and down completely randomly.
Pair Corralation between Haier Smart and Dow Jones
Assuming the 90 days horizon Haier Smart is expected to generate 1.79 times less return on investment than Dow Jones. In addition to that, Haier Smart is 3.52 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 4,053,993 in Dow Jones Industrial on October 25, 2024 and sell it today you would earn a total of 361,680 from holding Dow Jones Industrial or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Haier Smart Home vs. Dow Jones Industrial
Performance |
| Timeline |
Haier Smart and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Haier Smart Home
Pair trading matchups for Haier Smart
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Haier Smart and Dow Jones
The main advantage of trading using opposite Haier Smart and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart 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.| Haier Smart vs. Whirlpool | Haier Smart vs. Ethan Allen Interiors | Haier Smart vs. Mohawk Industries | Haier Smart vs. Tempur Sealy International |
| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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