Correlation Between Oversea Chinese and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Oversea Chinese 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 Oversea Chinese and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oversea Chinese Banking and Dow Jones Industrial, you can compare the effects of market volatilities on Oversea Chinese 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 Oversea Chinese with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oversea Chinese and Dow Jones.
Diversification Opportunities for Oversea Chinese and Dow Jones
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oversea and Dow is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oversea Chinese Banking 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 Oversea Chinese 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 Oversea Chinese Banking 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 Oversea Chinese i.e., Oversea Chinese and Dow Jones go up and down completely randomly.
Pair Corralation between Oversea Chinese and Dow Jones
Assuming the 90 days horizon Oversea Chinese Banking is expected to generate 3.69 times more return on investment than Dow Jones. However, Oversea Chinese is 3.69 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 881.00 in Oversea Chinese Banking on September 14, 2024 and sell it today you would earn a total of 319.00 from holding Oversea Chinese Banking or generate 36.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.55% |
| Values | Daily Returns |
Oversea Chinese Banking vs. Dow Jones Industrial
Performance |
| Timeline |
Oversea Chinese and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Oversea Chinese Banking
Pair trading matchups for Oversea Chinese
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Oversea Chinese and Dow Jones
The main advantage of trading using opposite Oversea Chinese and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oversea Chinese 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.| Oversea Chinese vs. HDFC Bank Limited | Oversea Chinese vs. US Bancorp | Oversea Chinese vs. Banco Santander Brasil | Oversea Chinese vs. Shinhan Financial Group |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |