Correlation Between Shandong Hongchuang and Dow Jones
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Dow Jones Industrial, you can compare the effects of market volatilities on Shandong Hongchuang 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 Shandong Hongchuang with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Dow Jones.
Diversification Opportunities for Shandong Hongchuang and Dow Jones
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shandong and Dow is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum 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 Shandong Hongchuang 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 Shandong Hongchuang Aluminum 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 Shandong Hongchuang i.e., Shandong Hongchuang and Dow Jones go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Dow Jones
Assuming the 90 days trading horizon Shandong Hongchuang Aluminum is expected to generate 5.78 times more return on investment than Dow Jones. However, Shandong Hongchuang is 5.78 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of risk. If you would invest 897.00 in Shandong Hongchuang Aluminum on November 3, 2024 and sell it today you would earn a total of 144.00 from holding Shandong Hongchuang Aluminum or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Dow Jones Industrial
Performance |
| Timeline |
Shandong Hongchuang and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shandong Hongchuang Aluminum
Pair trading matchups for Shandong Hongchuang
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shandong Hongchuang and Dow Jones
The main advantage of trading using opposite Shandong Hongchuang and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang 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.| Shandong Hongchuang vs. Eastern Communications Co | Shandong Hongchuang vs. Qtone Education Group | Shandong Hongchuang vs. Sinomach Automobile Co | Shandong Hongchuang vs. Wintao Communications Co |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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