Correlation Between China Express and Dow Jones
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By analyzing existing cross correlation between China Express Airlines and Dow Jones Industrial, you can compare the effects of market volatilities on China Express 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 China Express with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Express and Dow Jones.
Diversification Opportunities for China Express and Dow Jones
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Dow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Express Airlines 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 China Express 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 China Express Airlines 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 China Express i.e., China Express and Dow Jones go up and down completely randomly.
Pair Corralation between China Express and Dow Jones
Assuming the 90 days trading horizon China Express is expected to generate 1.96 times less return on investment than Dow Jones. In addition to that, China Express is 3.94 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 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.99% |
| Values | Daily Returns |
China Express Airlines vs. Dow Jones Industrial
Performance |
| Timeline |
China Express and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Express Airlines
Pair trading matchups for China Express
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Express and Dow Jones
The main advantage of trading using opposite China Express and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Express 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.| China Express vs. Cowealth Medical China | China Express vs. GKHT Medical Technology | China Express vs. Xian International Medical | China Express vs. Allmed Medical Products |
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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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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