Correlation Between Shandong Longquan and Dow Jones
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Dow Jones Industrial, you can compare the effects of market volatilities on Shandong Longquan 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 Longquan with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Dow Jones.
Diversification Opportunities for Shandong Longquan and Dow Jones
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Dow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline 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 Longquan 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 Longquan Pipeline 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 Longquan i.e., Shandong Longquan and Dow Jones go up and down completely randomly.
Pair Corralation between Shandong Longquan and Dow Jones
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 4.66 times more return on investment than Dow Jones. However, Shandong Longquan is 4.66 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 427.00 in Shandong Longquan Pipeline on August 28, 2024 and sell it today you would earn a total of 42.00 from holding Shandong Longquan Pipeline or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.76% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Dow Jones Industrial
Performance |
| Timeline |
Shandong Longquan and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shandong Longquan Pipeline
Pair trading matchups for Shandong Longquan
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shandong Longquan and Dow Jones
The main advantage of trading using opposite Shandong Longquan and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan 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 Longquan vs. Long Yuan Construction | Shandong Longquan vs. Allied Machinery Co | Shandong Longquan vs. Anhui Huilong Agricultural | Shandong Longquan vs. Metro Investment Development |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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