Correlation Between New Hope and Dow Jones
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By analyzing existing cross correlation between New Hope Dairy and Dow Jones Industrial, you can compare the effects of market volatilities on New Hope 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 New Hope with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Dow Jones.
Diversification Opportunities for New Hope and Dow Jones
Poor diversification
The 3 months correlation between New and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy 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 New Hope 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 New Hope Dairy 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 New Hope i.e., New Hope and Dow Jones go up and down completely randomly.
Pair Corralation between New Hope and Dow Jones
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 5.03 times more return on investment than Dow Jones. However, New Hope is 5.03 times more volatile than Dow Jones Industrial. It trades about 0.22 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 945.00 in New Hope Dairy on September 12, 2024 and sell it today you would earn a total of 503.00 from holding New Hope Dairy or generate 53.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
New Hope Dairy vs. Dow Jones Industrial
Performance |
| Timeline |
New Hope and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
New Hope Dairy
Pair trading matchups for New Hope
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with New Hope and Dow Jones
The main advantage of trading using opposite New Hope and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope 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.| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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