Correlation Between China Union and Dow Jones
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By analyzing existing cross correlation between China Union Holdings and Dow Jones Industrial, you can compare the effects of market volatilities on China Union 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 China Union with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Union and Dow Jones.
Diversification Opportunities for China Union and Dow Jones
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Dow is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Union 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 China Union 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 China Union 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 China Union i.e., China Union and Dow Jones go up and down completely randomly.
Pair Corralation between China Union and Dow Jones
Assuming the 90 days trading horizon China Union is expected to generate 4.73 times less return on investment than Dow Jones. In addition to that, China Union is 3.24 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.07 per unit of volatility. If you would invest 3,373,396 in Dow Jones Industrial on October 15, 2024 and sell it today you would earn a total of 820,449 from holding Dow Jones Industrial or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.37% |
| Values | Daily Returns |
China Union Holdings vs. Dow Jones Industrial
Performance |
| Timeline |
China Union and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Union Holdings
Pair trading matchups for China Union
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Union and Dow Jones
The main advantage of trading using opposite China Union and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Union 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.| China Union vs. Hua Xia Bank | China Union vs. Postal Savings Bank | China Union vs. Unisplendour Corp | China Union vs. Bomesc Offshore Engineering |
| Dow Jones vs. LB Foster | Dow Jones vs. Definitive Healthcare Corp | Dow Jones vs. TFI International | Dow Jones vs. Ryanair Holdings PLC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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