Correlation Between Longxing Chemical and Dow Jones
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By analyzing existing cross correlation between Longxing Chemical Stock and Dow Jones Industrial, you can compare the effects of market volatilities on Longxing Chemical 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 Longxing Chemical with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and Dow Jones.
Diversification Opportunities for Longxing Chemical and Dow Jones
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longxing and Dow is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock 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 Longxing Chemical 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 Longxing Chemical Stock 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 Longxing Chemical i.e., Longxing Chemical and Dow Jones go up and down completely randomly.
Pair Corralation between Longxing Chemical and Dow Jones
Assuming the 90 days trading horizon Longxing Chemical Stock is expected to generate 5.34 times more return on investment than Dow Jones. However, Longxing Chemical is 5.34 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 534.00 in Longxing Chemical Stock on October 26, 2024 and sell it today you would earn a total of 10.00 from holding Longxing Chemical Stock or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Longxing Chemical Stock vs. Dow Jones Industrial
Performance |
| Timeline |
Longxing Chemical and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Longxing Chemical Stock
Pair trading matchups for Longxing Chemical
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Longxing Chemical and Dow Jones
The main advantage of trading using opposite Longxing Chemical and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical 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.| Longxing Chemical vs. Beijing Baolande Software | Longxing Chemical vs. GuoChuang Software Co | Longxing Chemical vs. Northern United Publishing | Longxing Chemical vs. Guotai Epoint Software |
| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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