Correlation Between Linzhou Heavy and Dow Jones
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By analyzing existing cross correlation between Linzhou Heavy Machinery and Dow Jones Industrial, you can compare the effects of market volatilities on Linzhou Heavy 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 Linzhou Heavy with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and Dow Jones.
Diversification Opportunities for Linzhou Heavy and Dow Jones
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linzhou and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery 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 Linzhou Heavy 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 Linzhou Heavy Machinery 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 Linzhou Heavy i.e., Linzhou Heavy and Dow Jones go up and down completely randomly.
Pair Corralation between Linzhou Heavy and Dow Jones
Assuming the 90 days trading horizon Linzhou Heavy is expected to generate 1.83 times less return on investment than Dow Jones. In addition to that, Linzhou Heavy is 4.68 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,640,493 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 830,060 from holding Dow Jones Industrial or generate 22.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.95% |
| Values | Daily Returns |
Linzhou Heavy Machinery vs. Dow Jones Industrial
Performance |
| Timeline |
Linzhou Heavy and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Linzhou Heavy Machinery
Pair trading matchups for Linzhou Heavy
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Linzhou Heavy and Dow Jones
The main advantage of trading using opposite Linzhou Heavy and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy 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.| Linzhou Heavy vs. Chengdu Kanghua Biological | Linzhou Heavy vs. Beijing Wantai Biological | Linzhou Heavy vs. Suzhou Novoprotein Scientific | Linzhou Heavy vs. Aluminum Corp of |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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