Correlation Between Man Wah and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Man Wah 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 Man Wah and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Man Wah Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on Man Wah 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 Man Wah with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Man Wah and Dow Jones.
Diversification Opportunities for Man Wah and Dow Jones
Very weak diversification
The 3 months correlation between Man and Dow is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Man Wah Holdings 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 Man Wah 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 Man Wah Holdings 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 Man Wah i.e., Man Wah and Dow Jones go up and down completely randomly.
Pair Corralation between Man Wah and Dow Jones
Assuming the 90 days horizon Man Wah Holdings is expected to generate 8.47 times more return on investment than Dow Jones. However, Man Wah is 8.47 times more volatile than Dow Jones Industrial. It trades about 0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of risk. If you would invest 894.00 in Man Wah Holdings on September 2, 2024 and sell it today you would earn a total of 318.00 from holding Man Wah Holdings or generate 35.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Man Wah Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
Man Wah and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Man Wah Holdings
Pair trading matchups for Man Wah
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Man Wah and Dow Jones
The main advantage of trading using opposite Man Wah and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Man Wah 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.| Man Wah vs. Hisense Home Appliances | Man Wah vs. Luvu Brands | Man Wah vs. FGI Industries | Man Wah vs. Viomi Technology ADR |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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