Correlation Between SiS Distribution and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SiS Distribution 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 SiS Distribution and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiS Distribution Public and Dow Jones Industrial, you can compare the effects of market volatilities on SiS Distribution 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 SiS Distribution with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiS Distribution and Dow Jones.
Diversification Opportunities for SiS Distribution and Dow Jones
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SiS and Dow is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SiS Distribution Public 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 SiS Distribution 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 SiS Distribution Public 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 SiS Distribution i.e., SiS Distribution and Dow Jones go up and down completely randomly.
Pair Corralation between SiS Distribution and Dow Jones
Assuming the 90 days trading horizon SiS Distribution Public is expected to generate 4.3 times more return on investment than Dow Jones. However, SiS Distribution is 4.3 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 2,500 in SiS Distribution Public on August 29, 2024 and sell it today you would earn a total of 450.00 from holding SiS Distribution Public or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SiS Distribution Public vs. Dow Jones Industrial
Performance |
| Timeline |
SiS Distribution and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SiS Distribution Public
Pair trading matchups for SiS Distribution
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SiS Distribution and Dow Jones
The main advantage of trading using opposite SiS Distribution and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiS Distribution 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.| SiS Distribution vs. AP Public | SiS Distribution vs. Jasmine International Public | SiS Distribution vs. Asia Plus Group | SiS Distribution vs. Bangkok Aviation Fuel |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 CEOs Directory module to screen CEOs from public companies around the world.
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