Correlation Between Ningbo Tech and Dow Jones
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By analyzing existing cross correlation between Ningbo Tech Bank Co and Dow Jones Industrial, you can compare the effects of market volatilities on Ningbo 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 Ningbo Tech with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Tech and Dow Jones.
Diversification Opportunities for Ningbo Tech and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Tech Bank 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 Ningbo 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 Ningbo Tech Bank 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 Ningbo Tech i.e., Ningbo Tech and Dow Jones go up and down completely randomly.
Pair Corralation between Ningbo Tech and Dow Jones
Assuming the 90 days trading horizon Ningbo Tech Bank Co is expected to generate 3.93 times more return on investment than Dow Jones. However, Ningbo Tech is 3.93 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 254.00 in Ningbo Tech Bank Co on August 31, 2024 and sell it today you would earn a total of 74.00 from holding Ningbo Tech Bank Co or generate 29.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.06% |
| Values | Daily Returns |
Ningbo Tech Bank Co vs. Dow Jones Industrial
Performance |
| Timeline |
Ningbo Tech and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ningbo Tech Bank Co
Pair trading matchups for Ningbo Tech
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ningbo Tech and Dow Jones
The main advantage of trading using opposite Ningbo Tech and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo 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.| Ningbo Tech vs. Zhengzhou Qianweiyangchu Food | Ningbo Tech vs. Ligao Foods CoLtd | Ningbo Tech vs. Shaanxi Meineng Clean | Ningbo Tech vs. Sichuan Teway Food |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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