Correlation Between Skyworth Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Skyworth Group 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 Skyworth Group and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skyworth Group Limited and Dow Jones Industrial, you can compare the effects of market volatilities on Skyworth Group 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 Skyworth Group with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skyworth Group and Dow Jones.
Diversification Opportunities for Skyworth Group and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skyworth and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Skyworth Group Limited 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 Skyworth Group 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 Skyworth Group Limited 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 Skyworth Group i.e., Skyworth Group and Dow Jones go up and down completely randomly.
Pair Corralation between Skyworth Group and Dow Jones
Assuming the 90 days horizon Skyworth Group Limited is expected to generate 5.97 times more return on investment than Dow Jones. However, Skyworth Group is 5.97 times more volatile than Dow Jones Industrial. It trades about 0.02 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 39.00 in Skyworth Group Limited on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Skyworth Group Limited or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 58.47% |
| Values | Daily Returns |
Skyworth Group Limited vs. Dow Jones Industrial
Performance |
| Timeline |
Skyworth Group and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Skyworth Group Limited
Pair trading matchups for Skyworth Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Skyworth Group and Dow Jones
The main advantage of trading using opposite Skyworth Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skyworth Group 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.| Skyworth Group vs. Sony Group Corp | Skyworth Group vs. Wearable Devices | Skyworth Group vs. Sonos Inc | Skyworth Group vs. GoPro Inc |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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