Correlation Between TKH Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both TKH Group 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 TKH Group and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKH Group NV and Dow Jones Industrial, you can compare the effects of market volatilities on TKH Group 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 TKH Group with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKH Group and Dow Jones.
Diversification Opportunities for TKH Group and Dow Jones
Very poor diversification
The 3 months correlation between TKH and Dow is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding TKH Group NV 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 TKH Group 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 TKH Group NV 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 TKH Group i.e., TKH Group and Dow Jones go up and down completely randomly.
Pair Corralation between TKH Group and Dow Jones
Assuming the 90 days trading horizon TKH Group is expected to generate 1.04 times less return on investment than Dow Jones. In addition to that, TKH Group is 1.66 times more volatile than Dow Jones Industrial. It trades about 0.14 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.25 per unit of volatility. If you would invest 3,960,657 in Dow Jones Industrial on April 23, 2025 and sell it today you would earn a total of 489,587 from holding Dow Jones Industrial or generate 12.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 96.88% |
Values | Daily Returns |
TKH Group NV vs. Dow Jones Industrial
Performance |
Timeline |
TKH Group and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
TKH Group NV
Pair trading matchups for TKH Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with TKH Group and Dow Jones
The main advantage of trading using opposite TKH Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKH Group 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.TKH Group vs. Aalberts Industries NV | TKH Group vs. BE Semiconductor Industries | TKH Group vs. AMG Advanced Metallurgical | TKH Group vs. Koninklijke Vopak NV |
Dow Jones vs. Shenzhen Investment Holdings | Dow Jones vs. WT Offshore | Dow Jones vs. Guangdong Investment Limited | Dow Jones vs. KNOT Offshore Partners |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |