Correlation Between Xiamen Wanli and Dow Jones
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By analyzing existing cross correlation between Xiamen Wanli Stone and Dow Jones Industrial, you can compare the effects of market volatilities on Xiamen Wanli 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 Xiamen Wanli with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen Wanli and Dow Jones.
Diversification Opportunities for Xiamen Wanli and Dow Jones
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xiamen and Dow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen Wanli Stone 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 Xiamen Wanli 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 Xiamen Wanli Stone 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 Xiamen Wanli i.e., Xiamen Wanli and Dow Jones go up and down completely randomly.
Pair Corralation between Xiamen Wanli and Dow Jones
Assuming the 90 days trading horizon Xiamen Wanli Stone is expected to under-perform the Dow Jones. In addition to that, Xiamen Wanli is 4.03 times more volatile than Dow Jones Industrial. It trades about -0.09 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of volatility. If you would invest 4,470,553 in Dow Jones Industrial on November 3, 2024 and sell it today you would lose (16,087) from holding Dow Jones Industrial or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xiamen Wanli Stone vs. Dow Jones Industrial
Performance |
| Timeline |
Xiamen Wanli and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Xiamen Wanli Stone
Pair trading matchups for Xiamen Wanli
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Xiamen Wanli and Dow Jones
The main advantage of trading using opposite Xiamen Wanli and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen Wanli 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.| Xiamen Wanli vs. Harson Trading China | Xiamen Wanli vs. Cultural Investment Holdings | Xiamen Wanli vs. Beijing Kingsoft Office | Xiamen Wanli vs. Fibocom Wireless |
| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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