Correlation Between Uni President and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Uni President 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 Uni President and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uni President China Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on Uni President 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 Uni President with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni President and Dow Jones.
Diversification Opportunities for Uni President and Dow Jones
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uni and Dow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Uni President China Holdings 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 Uni President 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 Uni President China Holdings 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 Uni President i.e., Uni President and Dow Jones go up and down completely randomly.
Pair Corralation between Uni President and Dow Jones
Assuming the 90 days horizon Uni President China Holdings is expected to generate 22.47 times more return on investment than Dow Jones. However, Uni President is 22.47 times more volatile than Dow Jones Industrial. It trades about 0.06 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 Uni President China Holdings on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Uni President China Holdings or generate 128.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 74.55% |
| Values | Daily Returns |
Uni President China Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
Uni President and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Uni President China Holdings
Pair trading matchups for Uni President
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Uni President and Dow Jones
The main advantage of trading using opposite Uni President and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni President 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.| Uni President vs. Verde Clean Fuels | Uni President vs. Herc Holdings | Uni President vs. Willscot Mobile Mini | Uni President vs. Tootsie Roll Industries |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |