Correlation Between North Huajin and Dow Jones
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By analyzing existing cross correlation between North Huajin Chemical and Dow Jones Industrial, you can compare the effects of market volatilities on North Huajin 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 North Huajin with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Huajin and Dow Jones.
Diversification Opportunities for North Huajin and Dow Jones
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and Dow is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding North Huajin Chemical 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 North Huajin 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 North Huajin Chemical 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 North Huajin i.e., North Huajin and Dow Jones go up and down completely randomly.
Pair Corralation between North Huajin and Dow Jones
Assuming the 90 days trading horizon North Huajin Chemical is expected to under-perform the Dow Jones. In addition to that, North Huajin is 3.63 times more volatile than Dow Jones Industrial. It trades about -0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Huajin Chemical vs. Dow Jones Industrial
Performance |
| Timeline |
North Huajin and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
North Huajin Chemical
Pair trading matchups for North Huajin
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with North Huajin and Dow Jones
The main advantage of trading using opposite North Huajin and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Huajin 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.| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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