Correlation Between Thai Nakarin and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Thai Nakarin 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 Thai Nakarin and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Nakarin Hospital and Dow Jones Industrial, you can compare the effects of market volatilities on Thai Nakarin 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 Thai Nakarin with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Nakarin and Dow Jones.
Diversification Opportunities for Thai Nakarin and Dow Jones
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Thai Nakarin Hospital 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 Thai Nakarin 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 Thai Nakarin Hospital 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 Thai Nakarin i.e., Thai Nakarin and Dow Jones go up and down completely randomly.
Pair Corralation between Thai Nakarin and Dow Jones
Assuming the 90 days trading horizon Thai Nakarin is expected to generate 1.8 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Thai Nakarin Hospital is 1.24 times less risky than Dow Jones. It trades about 0.26 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 321,944 from holding Dow Jones Industrial or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thai Nakarin Hospital vs. Dow Jones Industrial
Performance |
| Timeline |
Thai Nakarin and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Thai Nakarin Hospital
Pair trading matchups for Thai Nakarin
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Thai Nakarin and Dow Jones
The main advantage of trading using opposite Thai Nakarin and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Nakarin 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.| Thai Nakarin vs. Vibhavadi Medical Center | Thai Nakarin vs. Ladprao General Hospital | Thai Nakarin vs. Ekachai Medical Care | Thai Nakarin vs. Chularat Hospital Public |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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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