Correlation Between Dow Jones and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Sun Sea 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 Dow Jones and Sun Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Sun Sea Construction, you can compare the effects of market volatilities on Dow Jones and Sun Sea 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 Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sun Sea.
Diversification Opportunities for Dow Jones and Sun Sea
Very weak diversification
The 3 months correlation between Dow and Sun is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction 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 Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Dow Jones i.e., Dow Jones and Sun Sea go up and down completely randomly.
Pair Corralation between Dow Jones and Sun Sea
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.52 times more return on investment than Sun Sea. However, Dow Jones Industrial is 1.92 times less risky than Sun Sea. It trades about -0.01 of its potential returns per unit of risk. Sun Sea Construction is currently generating about -0.06 per unit of risk. If you would invest 4,257,373 in Dow Jones Industrial on December 28, 2024 and sell it today you would lose (27,403) from holding Dow Jones Industrial or give up 0.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 91.67% |
Values | Daily Returns |
Dow Jones Industrial vs. Sun Sea Construction
Performance |
Timeline |
Dow Jones and Sun Sea Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sun Sea Construction
Pair trading matchups for Sun Sea
Pair Trading with Dow Jones and Sun Sea
The main advantage of trading using opposite Dow Jones and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea's long position.Dow Jones vs. PennantPark Investment | Dow Jones vs. Western Asset Investment | Dow Jones vs. Yoshitsu Co Ltd | Dow Jones vs. Black Hills |
Sun Sea vs. Wistron Information Technology | Sun Sea vs. Data International Co | Sun Sea vs. Gigastorage Corp | Sun Sea vs. K Way Information |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
CEOs Directory Screen CEOs from public companies around the world | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |