Correlation Between Shenzhen New and Dow Jones
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By analyzing existing cross correlation between Shenzhen New Nanshan and Dow Jones Industrial, you can compare the effects of market volatilities on Shenzhen New 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 Shenzhen New with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen New and Dow Jones.
Diversification Opportunities for Shenzhen New and Dow Jones
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Dow is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen New Nanshan 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 Shenzhen New 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 Shenzhen New Nanshan 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 Shenzhen New i.e., Shenzhen New and Dow Jones go up and down completely randomly.
Pair Corralation between Shenzhen New and Dow Jones
Assuming the 90 days trading horizon Shenzhen New is expected to generate 4.56 times less return on investment than Dow Jones. In addition to that, Shenzhen New is 2.53 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 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Shenzhen New Nanshan vs. Dow Jones Industrial
Performance |
| Timeline |
Shenzhen New and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shenzhen New Nanshan
Pair trading matchups for Shenzhen New
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shenzhen New and Dow Jones
The main advantage of trading using opposite Shenzhen New and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen New 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.| Shenzhen New vs. Industrial and Commercial | Shenzhen New vs. China Construction Bank | Shenzhen New vs. Bank of China | Shenzhen New vs. Agricultural Bank of |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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