Correlation Between Hainan Drinda and Dow Jones
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By analyzing existing cross correlation between Hainan Drinda Automotive and Dow Jones Industrial, you can compare the effects of market volatilities on Hainan Drinda 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 Hainan Drinda with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Drinda and Dow Jones.
Diversification Opportunities for Hainan Drinda and Dow Jones
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Dow is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Drinda Automotive 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 Hainan Drinda 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 Hainan Drinda Automotive 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 Hainan Drinda i.e., Hainan Drinda and Dow Jones go up and down completely randomly.
Pair Corralation between Hainan Drinda and Dow Jones
Assuming the 90 days trading horizon Hainan Drinda Automotive is expected to under-perform the Dow Jones. In addition to that, Hainan Drinda is 4.66 times more volatile than Dow Jones Industrial. It trades about -0.04 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 4,179,460 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 298,740 from holding Dow Jones Industrial or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hainan Drinda Automotive vs. Dow Jones Industrial
Performance |
| Timeline |
Hainan Drinda and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hainan Drinda Automotive
Pair trading matchups for Hainan Drinda
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hainan Drinda and Dow Jones
The main advantage of trading using opposite Hainan Drinda and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Drinda 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.| Hainan Drinda vs. Cultural Investment Holdings | Hainan Drinda vs. Gome Telecom Equipment | Hainan Drinda vs. Bus Online Co | Hainan Drinda vs. Holitech Technology Co |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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