Correlation Between Teka Construction and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Teka Construction 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 Teka Construction and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teka Construction PCL and Dow Jones Industrial, you can compare the effects of market volatilities on Teka Construction 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 Teka Construction with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teka Construction and Dow Jones.
Diversification Opportunities for Teka Construction and Dow Jones
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teka and Dow is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Teka Construction PCL 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 Teka Construction 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 Teka Construction PCL 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 Teka Construction i.e., Teka Construction and Dow Jones go up and down completely randomly.
Pair Corralation between Teka Construction and Dow Jones
Assuming the 90 days trading horizon Teka Construction PCL is expected to generate 1.8 times more return on investment than Dow Jones. However, Teka Construction is 1.8 times more volatile than Dow Jones Industrial. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.16 per unit of risk. If you would invest 222.00 in Teka Construction PCL on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Teka Construction PCL or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teka Construction PCL vs. Dow Jones Industrial
Performance |
| Timeline |
Teka Construction and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Teka Construction PCL
Pair trading matchups for Teka Construction
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Teka Construction and Dow Jones
The main advantage of trading using opposite Teka Construction and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teka Construction 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.| Teka Construction vs. TKrungthai Industries Public | Teka Construction vs. TCM Public | Teka Construction vs. Well Graded Engineering | Teka Construction vs. The Steel Public |
| Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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