Correlation Between Esso (Thailand) and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Esso (Thailand) 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 Esso (Thailand) and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esso Public and Dow Jones Industrial, you can compare the effects of market volatilities on Esso (Thailand) 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 Esso (Thailand) with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esso (Thailand) and Dow Jones.
Diversification Opportunities for Esso (Thailand) and Dow Jones
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Esso and Dow is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Esso Public 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 Esso (Thailand) 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 Esso Public 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 Esso (Thailand) i.e., Esso (Thailand) and Dow Jones go up and down completely randomly.
Pair Corralation between Esso (Thailand) and Dow Jones
Assuming the 90 days trading horizon Esso Public is expected to generate 3.45 times more return on investment than Dow Jones. However, Esso (Thailand) is 3.45 times more volatile than Dow Jones Industrial. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.14 per unit of risk. If you would invest 20.00 in Esso Public on September 22, 2024 and sell it today you would earn a total of 0.00 from holding Esso Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Esso Public vs. Dow Jones Industrial
Performance |
| Timeline |
Esso (Thailand) and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Esso Public
Pair trading matchups for Esso (Thailand)
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Esso (Thailand) and Dow Jones
The main advantage of trading using opposite Esso (Thailand) and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esso (Thailand) 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.| Esso (Thailand) vs. Superior Plus Corp | Esso (Thailand) vs. SIVERS SEMICONDUCTORS AB | Esso (Thailand) vs. Norsk Hydro ASA | Esso (Thailand) vs. Reliance Steel Aluminum |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Sabre Corpo | Dow Jones vs. Glacier Bancorp | Dow Jones vs. Barings BDC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |