Correlation Between China Longyuan and Dow Jones
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By analyzing existing cross correlation between China Longyuan Power and Dow Jones Industrial, you can compare the effects of market volatilities on China Longyuan 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 Longyuan with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Dow Jones.
Diversification Opportunities for China Longyuan and Dow Jones
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Dow is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power 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 Longyuan 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 Longyuan Power 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 Longyuan i.e., China Longyuan and Dow Jones go up and down completely randomly.
Pair Corralation between China Longyuan and Dow Jones
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the Dow Jones. In addition to that, China Longyuan is 2.89 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of volatility. If you would invest 3,409,586 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 1,081,479 from holding Dow Jones Industrial or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.65% |
| Values | Daily Returns |
China Longyuan Power vs. Dow Jones Industrial
Performance |
| Timeline |
China Longyuan and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Longyuan Power
Pair trading matchups for China Longyuan
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Longyuan and Dow Jones
The main advantage of trading using opposite China Longyuan and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan 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 Longyuan vs. China Minmetals Rare | China Longyuan vs. Vanfund Urban Investment | China Longyuan vs. Uroica Mining Safety | China Longyuan vs. Shanghai Material Trading |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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