Correlation Between Zhejiang Construction and Dow Jones
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By analyzing existing cross correlation between Zhejiang Construction Investment and Dow Jones Industrial, you can compare the effects of market volatilities on Zhejiang Construction 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 Zhejiang Construction with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and Dow Jones.
Diversification Opportunities for Zhejiang Construction and Dow Jones
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zhejiang and Dow is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme 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 Zhejiang Construction 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 Zhejiang Construction Investment 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 Zhejiang Construction i.e., Zhejiang Construction and Dow Jones go up and down completely randomly.
Pair Corralation between Zhejiang Construction and Dow Jones
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to under-perform the Dow Jones. In addition to that, Zhejiang Construction is 2.24 times more volatile than Dow Jones Industrial. It trades about -0.2 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.36 per unit of volatility. If you would invest 4,254,422 in Dow Jones Industrial on November 1, 2024 and sell it today you would earn a total of 216,930 from holding Dow Jones Industrial or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. Dow Jones Industrial
Performance |
| Timeline |
Zhejiang Construction and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Zhejiang Construction Investment
Pair trading matchups for Zhejiang Construction
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Zhejiang Construction and Dow Jones
The main advantage of trading using opposite Zhejiang Construction and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction 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.| Zhejiang Construction vs. Yindu Kitchen Equipment | Zhejiang Construction vs. Eastroc Beverage Group | Zhejiang Construction vs. Xiwang Foodstuffs Co | Zhejiang Construction vs. HaiXin Foods Co |
| Dow Jones vs. WEC Energy Group | Dow Jones vs. Pure Cycle | Dow Jones vs. Tandy Leather Factory | Dow Jones vs. Tapestry |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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