Correlation Between Singapore Technologies and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Singapore Technologies 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 Singapore Technologies and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Technologies Engineering and Dow Jones Industrial, you can compare the effects of market volatilities on Singapore Technologies 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 Singapore Technologies with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Technologies and Dow Jones.
Diversification Opportunities for Singapore Technologies and Dow Jones
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and Dow is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Technologies Enginee 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 Singapore Technologies 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 Singapore Technologies Engineering 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 Singapore Technologies i.e., Singapore Technologies and Dow Jones go up and down completely randomly.
Pair Corralation between Singapore Technologies and Dow Jones
Assuming the 90 days horizon Singapore Technologies Engineering is expected to generate 2.95 times more return on investment than Dow Jones. However, Singapore Technologies is 2.95 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of risk. If you would invest 2,856 in Singapore Technologies Engineering on September 3, 2024 and sell it today you would earn a total of 408.00 from holding Singapore Technologies Engineering or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.58% |
| Values | Daily Returns |
Singapore Technologies Enginee vs. Dow Jones Industrial
Performance |
| Timeline |
Singapore Technologies and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Singapore Technologies Engineering
Pair trading matchups for Singapore Technologies
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Singapore Technologies and Dow Jones
The main advantage of trading using opposite Singapore Technologies and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Technologies 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.| Singapore Technologies vs. Airbus Group SE | Singapore Technologies vs. Safran SA | Singapore Technologies vs. Embraer SA ADR | Singapore Technologies vs. BAE Systems PLC |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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