Correlation Between Dow Jones and SI TECH
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By analyzing existing cross correlation between Dow Jones Industrial and SI TECH Information Technology, you can compare the effects of market volatilities on Dow Jones and SI TECH 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 Dow Jones with a short position of SI TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SI TECH.
Diversification Opportunities for Dow Jones and SI TECH
Very weak diversification
The 3 months correlation between Dow and 300608 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SI TECH Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SI TECH Information and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with SI TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SI TECH Information has no effect on the direction of Dow Jones i.e., Dow Jones and SI TECH go up and down completely randomly.
Pair Corralation between Dow Jones and SI TECH
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.7 times less return on investment than SI TECH. But when comparing it to its historical volatility, Dow Jones Industrial is 6.15 times less risky than SI TECH. It trades about 0.07 of its potential returns per unit of risk. SI TECH Information Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 803.00 in SI TECH Information Technology on September 19, 2024 and sell it today you would earn a total of 460.00 from holding SI TECH Information Technology or generate 57.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.17% |
Values | Daily Returns |
Dow Jones Industrial vs. SI TECH Information Technology
Performance |
Timeline |
Dow Jones and SI TECH Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SI TECH Information Technology
Pair trading matchups for SI TECH
Pair Trading with Dow Jones and SI TECH
The main advantage of trading using opposite Dow Jones and SI TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SI TECH 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 SI TECH will offset losses from the drop in SI TECH's long position.Dow Jones vs. Mangazeya Mining | Dow Jones vs. Summit Materials | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. AMCON Distributing |
SI TECH vs. China Petroleum Chemical | SI TECH vs. PetroChina Co Ltd | SI TECH vs. China State Construction | SI TECH vs. China Railway Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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