Correlation Between Changchun and Dow Jones
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By analyzing existing cross correlation between Changchun UP Optotech and Dow Jones Industrial, you can compare the effects of market volatilities on Changchun 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 Changchun with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Dow Jones.
Diversification Opportunities for Changchun and Dow Jones
Very poor diversification
The 3 months correlation between Changchun and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech 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 Changchun 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 Changchun UP Optotech 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 Changchun i.e., Changchun and Dow Jones go up and down completely randomly.
Pair Corralation between Changchun and Dow Jones
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 5.21 times more return on investment than Dow Jones. However, Changchun is 5.21 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 3,760 in Changchun UP Optotech on August 29, 2024 and sell it today you would earn a total of 304.00 from holding Changchun UP Optotech or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Dow Jones Industrial
Performance |
| Timeline |
Changchun and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Changchun UP Optotech
Pair trading matchups for Changchun
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Changchun and Dow Jones
The main advantage of trading using opposite Changchun and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun 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.| Changchun vs. CGN Nuclear Technology | Changchun vs. Penyao Environmental Protection | Changchun vs. GreenTech Environmental Co | Changchun vs. Kangping Technology Co |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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