Correlation Between Huagong Tech and Dow Jones
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By analyzing existing cross correlation between Huagong Tech Co and Dow Jones Industrial, you can compare the effects of market volatilities on Huagong Tech 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 Huagong Tech with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huagong Tech and Dow Jones.
Diversification Opportunities for Huagong Tech and Dow Jones
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huagong and Dow is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Huagong Tech Co 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 Huagong Tech 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 Huagong Tech Co 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 Huagong Tech i.e., Huagong Tech and Dow Jones go up and down completely randomly.
Pair Corralation between Huagong Tech and Dow Jones
Assuming the 90 days trading horizon Huagong Tech Co is expected to under-perform the Dow Jones. In addition to that, Huagong Tech is 4.26 times more volatile than Dow Jones Industrial. It trades about -0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of volatility. If you would invest 4,270,656 in Dow Jones Industrial on November 7, 2024 and sell it today you would earn a total of 184,948 from holding Dow Jones Industrial or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Huagong Tech Co vs. Dow Jones Industrial
Performance |
| Timeline |
Huagong Tech and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Huagong Tech and Dow Jones
The main advantage of trading using opposite Huagong Tech and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huagong Tech 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 Huagong Tech Co 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. Viemed Healthcare | Dow Jones vs. Alphatec Holdings | Dow Jones vs. Tandem Diabetes Care | Dow Jones vs. Alvotech |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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