Correlation Between Kang Yong and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kang Yong 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 Kang Yong and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kang Yong Electric and Dow Jones Industrial, you can compare the effects of market volatilities on Kang Yong 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 Kang Yong with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kang Yong and Dow Jones.
Diversification Opportunities for Kang Yong and Dow Jones
Modest diversification
The 3 months correlation between Kang and Dow is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kang Yong Electric 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 Kang Yong 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 Kang Yong Electric 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 Kang Yong i.e., Kang Yong and Dow Jones go up and down completely randomly.
Pair Corralation between Kang Yong and Dow Jones
Assuming the 90 days trading horizon Kang Yong Electric is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Kang Yong Electric is 3.01 times less risky than Dow Jones. The stock trades about -0.15 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kang Yong Electric vs. Dow Jones Industrial
Performance |
| Timeline |
Kang Yong and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kang Yong Electric
Pair trading matchups for Kang Yong
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kang Yong and Dow Jones
The main advantage of trading using opposite Kang Yong and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kang Yong 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.| Kang Yong vs. SCB X Public | Kang Yong vs. Kasikornbank Public | Kang Yong vs. PTT Public | Kang Yong vs. Kasikornbank Public |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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