Correlation Between TBC Bank and Dow Jones
Can any of the company-specific risk be diversified away by investing in both TBC Bank 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 TBC Bank and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TBC Bank Group and Dow Jones Industrial, you can compare the effects of market volatilities on TBC Bank 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 TBC Bank with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Dow Jones.
Diversification Opportunities for TBC Bank and Dow Jones
Very weak diversification
The 3 months correlation between TBC and Dow is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank Group 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 TBC Bank 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 TBC Bank Group 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 TBC Bank i.e., TBC Bank and Dow Jones go up and down completely randomly.
Pair Corralation between TBC Bank and Dow Jones
Assuming the 90 days trading horizon TBC Bank Group is expected to under-perform the Dow Jones. In addition to that, TBC Bank is 1.75 times more volatile than Dow Jones Industrial. It trades about -0.13 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.21 per unit of volatility. If you would invest 4,414,856 in Dow Jones Industrial on October 12, 2024 and sell it today you would lose (151,336) from holding Dow Jones Industrial or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
TBC Bank Group vs. Dow Jones Industrial
Performance |
| Timeline |
TBC Bank and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
TBC Bank Group
Pair trading matchups for TBC Bank
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TBC Bank and Dow Jones
The main advantage of trading using opposite TBC Bank and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBC Bank 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.| TBC Bank vs. Auction Technology Group | TBC Bank vs. Coor Service Management | TBC Bank vs. Alfa Financial Software | TBC Bank vs. Monster Beverage Corp |
| Dow Jones vs. Toro | Dow Jones vs. Foot Locker | Dow Jones vs. Abercrombie Fitch | Dow Jones vs. 51Talk Online Education |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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