Correlation Between Pan Asia and Dow Jones
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By analyzing existing cross correlation between Pan Asia Banking and Dow Jones Industrial, you can compare the effects of market volatilities on Pan Asia 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 Pan Asia with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Asia and Dow Jones.
Diversification Opportunities for Pan Asia and Dow Jones
Very poor diversification
The 3 months correlation between Pan and Dow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pan Asia 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 Pan Asia 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 Pan Asia 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 Pan Asia i.e., Pan Asia and Dow Jones go up and down completely randomly.
Pair Corralation between Pan Asia and Dow Jones
Assuming the 90 days trading horizon Pan Asia Banking is expected to generate 3.53 times more return on investment than Dow Jones. However, Pan Asia is 3.53 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 0.08 per unit of risk. If you would invest 930.00 in Pan Asia Banking on August 27, 2024 and sell it today you would earn a total of 1,720 from holding Pan Asia Banking or generate 184.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.36% |
Values | Daily Returns |
Pan Asia Banking vs. Dow Jones Industrial
Performance |
Timeline |
Pan Asia and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Pan Asia Banking
Pair trading matchups for Pan Asia
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pan Asia and Dow Jones
The main advantage of trading using opposite Pan Asia and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Asia 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.Pan Asia vs. Sri Lanka Telecom | Pan Asia vs. ACL Plastics PLC | Pan Asia vs. Merchant Bank of | Pan Asia vs. Mahaweli Reach Hotel |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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