Correlation Between Khon Kaen and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Khon Kaen 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 Khon Kaen and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khon Kaen Sugar and Dow Jones Industrial, you can compare the effects of market volatilities on Khon Kaen 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 Khon Kaen with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khon Kaen and Dow Jones.
Diversification Opportunities for Khon Kaen and Dow Jones
Weak diversification
The 3 months correlation between Khon and Dow is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Khon Kaen Sugar 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 Khon Kaen 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 Khon Kaen Sugar 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 Khon Kaen i.e., Khon Kaen and Dow Jones go up and down completely randomly.
Pair Corralation between Khon Kaen and Dow Jones
Assuming the 90 days trading horizon Khon Kaen Sugar is expected to generate 88.32 times more return on investment than Dow Jones. However, Khon Kaen is 88.32 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 261.00 in Khon Kaen Sugar on November 3, 2024 and sell it today you would lose (82.00) from holding Khon Kaen Sugar or give up 31.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Khon Kaen Sugar vs. Dow Jones Industrial
Performance |
| Timeline |
Khon Kaen and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Khon Kaen Sugar
Pair trading matchups for Khon Kaen
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Khon Kaen and Dow Jones
The main advantage of trading using opposite Khon Kaen and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khon Kaen 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.| Khon Kaen vs. Ichitan Group Public | Khon Kaen vs. Italian Thai Development Public | Khon Kaen vs. GFPT Public | Khon Kaen vs. Dynasty Ceramic Public |
| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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.
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