Correlation Between STANDARD CHARTERED and Dow Jones
Can any of the company-specific risk be diversified away by investing in both STANDARD CHARTERED 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 STANDARD CHARTERED and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STANDARD CHARTERED BANK and Dow Jones Industrial, you can compare the effects of market volatilities on STANDARD CHARTERED 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 STANDARD CHARTERED with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANDARD CHARTERED and Dow Jones.
Diversification Opportunities for STANDARD CHARTERED and Dow Jones
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STANDARD and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding STANDARD CHARTERED BANK 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 STANDARD CHARTERED 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 STANDARD CHARTERED BANK 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 STANDARD CHARTERED i.e., STANDARD CHARTERED and Dow Jones go up and down completely randomly.
Pair Corralation between STANDARD CHARTERED and Dow Jones
Assuming the 90 days trading horizon STANDARD CHARTERED BANK is expected to generate 1.96 times more return on investment than Dow Jones. However, STANDARD CHARTERED is 1.96 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 0.08 per unit of risk. If you would invest 14,225 in STANDARD CHARTERED BANK on September 3, 2024 and sell it today you would earn a total of 10,100 from holding STANDARD CHARTERED BANK or generate 71.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
STANDARD CHARTERED BANK vs. Dow Jones Industrial
Performance |
| Timeline |
STANDARD CHARTERED and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
STANDARD CHARTERED BANK
Pair trading matchups for STANDARD CHARTERED
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with STANDARD CHARTERED and Dow Jones
The main advantage of trading using opposite STANDARD CHARTERED and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STANDARD CHARTERED 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.| STANDARD CHARTERED vs. HOME AFRIKA LTD | STANDARD CHARTERED vs. ABSA BANK OF | STANDARD CHARTERED vs. DIAMOND TRUST BANK | STANDARD CHARTERED vs. CIC INSURANCE GROUP |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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