Correlation Between China Greatwall and Dow Jones
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By analyzing existing cross correlation between China Greatwall Computer and Dow Jones Industrial, you can compare the effects of market volatilities on China Greatwall 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 Greatwall with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Greatwall and Dow Jones.
Diversification Opportunities for China Greatwall and Dow Jones
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Dow is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Greatwall Computer 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 Greatwall 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 Greatwall Computer 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 Greatwall i.e., China Greatwall and Dow Jones go up and down completely randomly.
Pair Corralation between China Greatwall and Dow Jones
Assuming the 90 days trading horizon China Greatwall Computer is expected to generate 3.7 times more return on investment than Dow Jones. However, China Greatwall is 3.7 times more volatile than Dow Jones Industrial. It trades about 0.14 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of risk. If you would invest 1,343 in China Greatwall Computer on November 9, 2024 and sell it today you would earn a total of 80.00 from holding China Greatwall Computer or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
China Greatwall Computer vs. Dow Jones Industrial
Performance |
| Timeline |
China Greatwall and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Greatwall and Dow Jones
The main advantage of trading using opposite China Greatwall and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Greatwall 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.The idea behind China Greatwall Computer and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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