Correlation Between Tien Giang and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Tien Giang 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 Tien Giang and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tien Giang Investment and Dow Jones Industrial, you can compare the effects of market volatilities on Tien Giang 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 Tien Giang with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tien Giang and Dow Jones.
Diversification Opportunities for Tien Giang and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tien and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tien Giang Investment 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 Tien Giang 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 Tien Giang Investment 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 Tien Giang i.e., Tien Giang and Dow Jones go up and down completely randomly.
Pair Corralation between Tien Giang and Dow Jones
Assuming the 90 days trading horizon Tien Giang Investment is expected to generate 2.55 times more return on investment than Dow Jones. However, Tien Giang is 2.55 times more volatile than Dow Jones Industrial. It trades about 0.26 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of risk. If you would invest 5,030,000 in Tien Giang Investment on November 4, 2024 and sell it today you would earn a total of 420,000 from holding Tien Giang Investment or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Tien Giang Investment vs. Dow Jones Industrial
Performance |
| Timeline |
Tien Giang and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Tien Giang Investment
Pair trading matchups for Tien Giang
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Tien Giang and Dow Jones
The main advantage of trading using opposite Tien Giang and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tien Giang 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.| Tien Giang vs. FIT INVEST JSC | Tien Giang vs. Damsan JSC | Tien Giang vs. An Phat Plastic | Tien Giang vs. APG Securities Joint |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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