Correlation Between Guangdong Tianhe and Dow Jones
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By analyzing existing cross correlation between Guangdong Tianhe Agricultural and Dow Jones Industrial, you can compare the effects of market volatilities on Guangdong Tianhe 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 Guangdong Tianhe with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Tianhe and Dow Jones.
Diversification Opportunities for Guangdong Tianhe and Dow Jones
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Dow is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Tianhe Agricultural 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 Guangdong Tianhe 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 Guangdong Tianhe Agricultural 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 Guangdong Tianhe i.e., Guangdong Tianhe and Dow Jones go up and down completely randomly.
Pair Corralation between Guangdong Tianhe and Dow Jones
Assuming the 90 days trading horizon Guangdong Tianhe Agricultural is expected to under-perform the Dow Jones. In addition to that, Guangdong Tianhe is 3.87 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 0.09 per unit of volatility. If you would invest 3,358,652 in Dow Jones Industrial on October 29, 2024 and sell it today you would earn a total of 1,083,773 from holding Dow Jones Industrial or generate 32.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.91% |
| Values | Daily Returns |
Guangdong Tianhe Agricultural vs. Dow Jones Industrial
Performance |
| Timeline |
Guangdong Tianhe and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Guangdong Tianhe Agricultural
Pair trading matchups for Guangdong Tianhe
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Guangdong Tianhe and Dow Jones
The main advantage of trading using opposite Guangdong Tianhe and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Tianhe 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.| Guangdong Tianhe vs. Montage Technology Co | Guangdong Tianhe vs. Baoshan Iron Steel | Guangdong Tianhe vs. Fujian Nanwang Environment | Guangdong Tianhe vs. Bangyan Technology Co |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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