Correlation Between Shui On and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Shui On 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 Shui On and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shui On Land and Dow Jones Industrial, you can compare the effects of market volatilities on Shui On 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 Shui On with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shui On and Dow Jones.
Diversification Opportunities for Shui On and Dow Jones
Average diversification
The 3 months correlation between Shui and Dow is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shui On Land 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 Shui On 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 Shui On Land 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 Shui On i.e., Shui On and Dow Jones go up and down completely randomly.
Pair Corralation between Shui On and Dow Jones
Assuming the 90 days horizon Shui On Land is expected to generate 32.22 times more return on investment than Dow Jones. However, Shui On is 32.22 times more volatile than Dow Jones Industrial. It trades about 0.06 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 12.00 in Shui On Land on September 3, 2024 and sell it today you would lose (6.00) from holding Shui On Land or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 32.73% |
| Values | Daily Returns |
Shui On Land vs. Dow Jones Industrial
Performance |
| Timeline |
Shui On and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shui On Land
Pair trading matchups for Shui On
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shui On and Dow Jones
The main advantage of trading using opposite Shui On and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shui On 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.| Shui On vs. Chemours Co | Shui On vs. Axalta Coating Systems | Shui On vs. NioCorp Developments Ltd | Shui On vs. Avient Corp |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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